SAEE Valuation Reporting Requirements 3 — Questions and Answers
Question 1: The scope of work in a report should reflect:
- The fee charged only
- The type and extent of research and analysis performed (Correct answer)
- The client's preferred value
- The appraiser's office hours
Correct answer: The type and extent of research and analysis performed
Scope of work describes the research and analysis actually performed to develop credible results.
Question 2: If a value opinion relies on an extraordinary assumption, the report must:
- Hide it from the client
- Clearly disclose the assumption (Correct answer)
- Treat it as a hypothetical condition
- Ignore its effect on value
Correct answer: Clearly disclose the assumption
Extraordinary assumptions must be disclosed because, if false, they could alter the conclusions.
Question 3: A hypothetical condition differs from an extraordinary assumption because it:
- Is known to be contrary to fact as of the effective date (Correct answer)
- Is always true
- Requires no disclosure
- Applies only to commercial property
Correct answer: Is known to be contrary to fact as of the effective date
A hypothetical condition is presumed contrary to known facts but used for analysis purposes.
Question 4: Reporting requirements generally demand that the report be:
- Misleading if it helps the client
- Not misleading and contain sufficient information (Correct answer)
- As brief as possible regardless of clarity
- Verbal in all cases
Correct answer: Not misleading and contain sufficient information
Reports must be clear, not misleading, and contain enough information for intended users to understand them.
Question 5: The identification of the property rights appraised should appear:
- Only in the workfile
- In the report (Correct answer)
- Verbally to the lender
- Nowhere, to save space
Correct answer: In the report
The interest or rights being valued (e.g., fee simple, leased fee) must be stated in the report.
Question 6: When multiple appraisers sign a report, each signer:
- Is responsible only for typing
- Accepts responsibility per their certification (Correct answer)
- Has no liability
- Must be the client
Correct answer: Accepts responsibility per their certification
Each appraiser who signs accepts the responsibilities described in their certification.
Question 7: A report that omits the definition of value used would be considered:
- Acceptable
- Potentially misleading and deficient (Correct answer)
- More credible
- Exempt from review
Correct answer: Potentially misleading and deficient
Stating the applicable definition of value (e.g., market value) is required for the conclusion to be meaningful.
SAEE Valuation Reporting Requirements 3
The scope of work in a report should reflect: