RPA Report Writing & Ethical Standards 5 — Questions and Answers
Question 1: Which type of report option provides the MOST detail and is most commonly used for complex residential and commercial appraisals?
- Appraisal Report (Correct answer)
- Restricted Appraisal Report
- Summary Appraisal Report
- Limited Appraisal Report
Correct answer: Appraisal Report
The Appraisal Report (formerly Summary) is the most detailed report option under current USPAP and is used when full disclosure to multiple users is needed.
Question 2: A property appraiser is asked to re-certify an appraisal report originally prepared two years ago. Under USPAP, the appraiser must:
- Update or re-examine the original report to ensure it still reflects current conditions before re-certifying (Correct answer)
- Simply re-sign the original report with the current date
- Refuse, as re-certification is not permitted under USPAP
- Consult the original client before making any changes
Correct answer: Update or re-examine the original report to ensure it still reflects current conditions before re-certifying
Re-certifying a prior report requires updating or re-examining the analysis to confirm it remains credible given current market conditions.
Question 3: Which statement about the work file requirement is TRUE?
- The work file must contain sufficient information to allow another appraiser to replicate the analysis (Correct answer)
- The work file only needs to include the signed copy of the final report
- Work files for non-federally related transactions are exempt from USPAP requirements
- Digital work files are not acceptable under USPAP
Correct answer: The work file must contain sufficient information to allow another appraiser to replicate the analysis
USPAP requires the work file to include enough data and documentation that a peer could understand the appraiser's reasoning and analysis.
Question 4: Under USPAP, the 'client' is defined as:
- The party who engages and is responsible for payment of the appraisal (Correct answer)
- Any party who will use the appraisal to make a financial decision
- The lender who orders the appraisal for mortgage purposes
- The intended user who holds ownership of the subject property
Correct answer: The party who engages and is responsible for payment of the appraisal
The client is the party—individual or entity—who engages the appraiser and is typically responsible for the appraisal fee.
Question 5: When an appraiser performs an appraisal for litigation support, which USPAP obligation is especially critical?
- Independence and objectivity, since the appraiser must not advocate for either party (Correct answer)
- Use of the income approach as the primary indicator of value
- Disclosure of the fee to the court before testimony
- Use of a Restricted Appraisal Report format to protect confidentiality
Correct answer: Independence and objectivity, since the appraiser must not advocate for either party
In litigation, appraiser independence and objectivity are paramount; the appraiser serves as an expert witness, not an advocate for the retaining party.
Question 6: If an appraiser uses another appraiser's work (e.g., a prior appraisal report) in developing an opinion, USPAP requires the appraiser to:
- Disclose reliance on the other appraiser's work and determine if it is appropriate to rely on it (Correct answer)
- Obtain written consent from the original appraiser before referencing their report
- Conduct a full Standard 3 appraisal review of the prior report
- Exclude the prior report from the work file to avoid conflicts of interest
Correct answer: Disclose reliance on the other appraiser's work and determine if it is appropriate to rely on it
When relying on another appraiser's work product, the appraiser must disclose this reliance and assess whether it is reasonable and appropriate.
Question 7: The USPAP Scope of Work Rule's 'problem identification' step requires the appraiser to identify all of the following EXCEPT:
- The appraiser's hourly billing rate for the assignment (Correct answer)
- The intended use of the appraisal
- The type and definition of value
- The effective date of the appraisal
Correct answer: The appraiser's hourly billing rate for the assignment
Scope of work problem identification requires identifying the client, intended users, intended use, type of value, effective date, and relevant characteristics — not the appraiser's fee structure.
RPA Report Writing & Ethical Standards 5
Which type of report option provides the MOST detail and is most commonly used for complex residential and commercial appraisals?