IACP Reporting Standards & Documentation Practices 5 — Questions and Answers
Question 1: An appraiser completes a report and later discovers a significant error that affects the value conclusion. USPAP requires the appraiser to:
- File a corrected report with the state board
- Notify the client and correct the report (Correct answer)
- Retain the original and note the error in the workfile
- Withdraw from the assignment retroactively
Correct answer: Notify the client and correct the report
Upon discovering a material error, the appraiser must promptly notify the client and issue a corrected or amended report.
Question 2: The signature on an appraisal report certifies that the appraiser:
- Guarantees the property will sell at the stated value
- Accepts personal liability for any lender losses
- Is responsible for and stands behind the contents of the report (Correct answer)
- Has passed a state-mandated peer review
Correct answer: Is responsible for and stands behind the contents of the report
Signing the report means the appraiser takes responsibility for the analysis, opinions, and conclusions contained in it.
Question 3: When a supervisory appraiser co-signs an appraisal prepared by a trainee, the supervisory appraiser is:
- Only responsible for the trainee's education hours
- Equally responsible for the content and conclusions (Correct answer)
- Responsible only for the cost approach section
- Exempt from USPAP if the trainee is licensed
Correct answer: Equally responsible for the content and conclusions
A co-signing supervisory appraiser assumes equal responsibility for the entire appraisal report.
Question 4: The scope of work for an appraisal assignment must be disclosed in the report at a level of detail that:
- Allows users to replicate the exact analysis
- Is sufficient for the client's intended use only
- Allows intended users to understand what was and was not done (Correct answer)
- Satisfies the minimum requirements set by the lender
Correct answer: Allows intended users to understand what was and was not done
USPAP requires scope of work disclosure sufficient for intended users to understand what the appraiser did and did not do in the assignment.
Question 5: A client asks an appraiser to omit a negative property characteristic from the report. The appraiser should:
- Comply if the client signs a hold-harmless agreement
- Refuse, because omitting material information violates USPAP (Correct answer)
- Omit it if the impact on value is less than 5%
- Seek a second opinion from another appraiser
Correct answer: Refuse, because omitting material information violates USPAP
Omitting material information that could mislead intended users violates USPAP's prohibition on misleading reports.
Question 6: Which statement about the 'as-is' value versus 'as-repaired' value distinction is correct from a reporting perspective?
- Both values may appear in a single report if clearly labeled (Correct answer)
- As-repaired value replaces as-is value in all lending appraisals
- As-is value is only reported when the property is distressed
- Only one value opinion is permitted per USPAP assignment
Correct answer: Both values may appear in a single report if clearly labeled
A single appraisal report may include both as-is and as-repaired value opinions provided each is clearly identified and supported.
Question 7: When market conditions are changing rapidly, which reporting element is most critical to update before finalizing the report?
- The legal description of the subject
- The neighborhood analysis and market conditions section (Correct answer)
- The zoning compliance statement
- The assessor's parcel number
Correct answer: The neighborhood analysis and market conditions section
In volatile markets, the neighborhood and market conditions section must reflect the most current trends to support a credible value conclusion.
IACP Reporting Standards & Documentation Practices 5
An appraiser completes a report and later discovers a significant error that affects the value conclusion.
USPAP requires the appraiser to: