USPAP Appraisal Development Standards Flashcards

Under USPAP Standards Rule 1-1, an appraiser must NOT render appraisal services in a careless or negligent manner. This standard requires the appraiser to:

Answer: Exercise diligence and competence in every assignment

SR 1-1 requires appraisers to exercise diligence and competence, prohibiting careless or negligent performance in any appraisal assignment.

Under USPAP, which of the following correctly defines 'market value'?

Answer: The most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale

Market value is the most probable price a property would sell for in an open, competitive market between informed parties acting prudently.

Under USPAP Standards Rule 1-3, when the value to be developed is market value, the appraiser must:

Answer: Identify and analyze the effect on value of existing and anticipated market conditions

SR 1-3 requires the appraiser to identify and analyze market conditions that affect value, including supply and demand, and typical exposure time.

The principle of 'highest and best use' is required to be analyzed under USPAP because it:

Answer: Identifies the use that produces the greatest value and forms the basis for value development

Highest and best use identifies the most profitable and legally permitted use of a property, which forms the essential foundation for any market value opinion.

Under USPAP Standards Rule 1-4, when developing a real property appraisal, an appraiser must consider which approaches to value?

Answer: All applicable approaches to value

SR 1-4 requires the appraiser to consider and develop all applicable approaches to value — cost, sales comparison, and income — when applicable.

Under USPAP, 'reconciliation' in the development of a value opinion means:

Answer: Analyzing and weighing the results of all approaches to reach a final value conclusion

Reconciliation is the process of analyzing and weighing the results of applicable approaches to arrive at a well-supported final value conclusion.