RAA Residential Appraisal Report Writing 2 — Questions and Answers
Question 1: In the 'Site' section of the URAR, the appraiser must note the property's zoning classification. If a legal nonconforming use exists, which of the following best describes the appraiser's obligation?
- Report only the current use and ignore the nonconforming status
- Disclose the nonconforming status and analyze its effect on marketability and value (Correct answer)
- Decline to appraise the property until zoning is brought into conformance
- Report the zoning as conforming since the use predates current regulations
Correct answer: Disclose the nonconforming status and analyze its effect on marketability and value
The appraiser must disclose legal nonconforming use status and analyze how it affects the property's marketability and value, since such properties may face rebuilding restrictions.
Question 2: When an appraiser reports physical characteristics of the improvements in the 'Improvements' section of Form 1004, which of the following measurements is typically required for the gross living area (GLA)?
- Interior measured square footage of all rooms including garage and basement
- Exterior measured above-grade finished living area only (Correct answer)
- Interior measured area of above-grade conditioned spaces only
- Total lot coverage including all attached structures
Correct answer: Exterior measured above-grade finished living area only
Fannie Mae guidelines require GLA to be calculated from exterior measurements and include only above-grade finished living space, consistent with ANSI Z765 standards.
Question 3: A client asks an appraiser to provide a value conclusion 'as of' a date that is three years in the past. According to USPAP, what is this type of appraisal called?
- Prospective appraisal
- Retrospective appraisal (Correct answer)
- Hypothetical appraisal
- Limited scope appraisal
Correct answer: Retrospective appraisal
A retrospective appraisal has an effective date that is in the past, requiring the appraiser to use only market data that was available as of that historical effective date.
Question 4: Which of the following best describes the purpose of the 'Appraiser's Certification' section found in the URAR (Form 1004)?
- It certifies the property is free of environmental hazards
- It certifies the lender has reviewed and approved the appraisal
- It certifies the appraiser's compliance with USPAP and independence requirements (Correct answer)
- It certifies that the borrower has received a copy of the appraisal
Correct answer: It certifies the appraiser's compliance with USPAP and independence requirements
The Appraiser's Certification is a signed statement confirming the appraiser's independence, objectivity, and compliance with USPAP and applicable appraisal standards.
Question 5: When completing the 'Sales Comparison Approach' grid on Form 1004, what does a negative adjustment to a comparable sale indicate?
- The subject property is inferior to the comparable in that feature (Correct answer)
- The comparable is inferior to the subject in that feature
- The feature has no contributory value in the market
- The adjustment reduces the appraiser's confidence in the comparable
Correct answer: The subject property is inferior to the comparable in that feature
A negative adjustment to a comparable means the comparable is superior to the subject in that feature, so its sale price must be reduced to reflect the subject's lesser quality.
Question 6: In an appraisal report, what is a 'hypothetical condition' as defined by USPAP?
- An assumption about uncertain information that is believed to be true
- A condition that is contrary to what is known to exist on the effective date of the appraisal (Correct answer)
- A forecast of market conditions expected in the future
- A condition approved by the client before the assignment begins
Correct answer: A condition that is contrary to what is known to exist on the effective date of the appraisal
A hypothetical condition is one that is contrary to known fact as of the effective date, used when the assignment requires analysis of a condition that does not currently exist.
Question 7: When must an appraiser include an 'Intended Use' statement in an appraisal report?
- Only when the report will be used in a court of law
- In every appraisal report, as required by USPAP (Correct answer)
- Only when the report is provided to a federally regulated lender
- Only for properties valued above $1,000,000
Correct answer: In every appraisal report, as required by USPAP
USPAP requires that every appraisal report identify the intended use of the appraisal and the intended users, without exception, as part of the required content of any report.
RAA Residential Appraisal Report Writing 2
In the 'Site' section of the URAR, the appraiser must note the property's zoning classification.
If a legal nonconforming use exists, which of the following best describes the appraiser's obligation?