USPAP USPAP General 4 — Questions and Answers
Question 1: USPAP Standards Rule 1-5 requires an appraiser to analyze agreements of sale, listings, and prior sales of the subject property. How far back must the appraiser analyze prior sales?
- One year for all property types
- Three years for improved properties and five years for vacant land (Correct answer)
- Five years for all property types
- No time limit is specified; the appraiser uses judgment
Correct answer: Three years for improved properties and five years for vacant land
USPAP SR 1-5 requires analysis of prior sales within three years for improved properties and five years for vacant land.
Question 2: Under USPAP, which of the following actions by an appraiser violates the Independence section of the Ethics Rule?
- Performing an appraisal for a bank where the appraiser also holds a savings account
- Allowing a client's preferred value to influence the appraiser's analysis and conclusion (Correct answer)
- Completing an appraisal without inspecting the interior of the property
- Charging a higher fee for a rush assignment
Correct answer: Allowing a client's preferred value to influence the appraiser's analysis and conclusion
Allowing client pressure or a preferred value to influence the appraiser's conclusion violates the independence requirement of the Ethics Rule.
Question 3: Which of the following best describes 'jurisdictional exception' under USPAP?
- An exception that allows appraisers to ignore market data in certain states
- A provision that permits departure from USPAP requirements when law or regulation in a jurisdiction prohibits compliance (Correct answer)
- Permission granted by a state board to use non-USPAP methods
- A client-requested deviation from standard appraisal practice
Correct answer: A provision that permits departure from USPAP requirements when law or regulation in a jurisdiction prohibits compliance
Jurisdictional exception applies when law or regulation of a jurisdiction precludes compliance with a part of USPAP, and the appraiser must identify and explain the exception.
Question 4: USPAP's definition of 'market value' requires that the transaction be between parties who are:
- Related by family or business ties to ensure cooperation
- Both acting prudently and knowledgeably, with neither under undue pressure to transact (Correct answer)
- Represented by the same real estate broker to minimize costs
- Located in the same geographic market area
Correct answer: Both acting prudently and knowledgeably, with neither under undue pressure to transact
Market value assumes both buyer and seller are prudent, knowledgeable, and neither is under compulsion to complete the transaction.
Question 5: Under USPAP, a 'client' is defined as:
- Any person who benefits from the appraisal
- The party or parties who engage an appraiser (by employment or contract) in a specific assignment (Correct answer)
- The intended user who will rely on the appraisal for a decision
- The property owner regardless of who ordered the report
Correct answer: The party or parties who engage an appraiser (by employment or contract) in a specific assignment
The client is the party who engages the appraiser; being a client does not require being the property owner or an intended user.
Question 6: Which of the following statements about USPAP's Scope of Work Rule is correct?
- The client always determines the scope of work
- The scope of work must be sufficient for the assignment to produce credible assignment results (Correct answer)
- USPAP mandates a fixed scope of work for all residential appraisals
- The appraiser may not deviate from the scope of work agreed upon at engagement
Correct answer: The scope of work must be sufficient for the assignment to produce credible assignment results
The Scope of Work Rule requires that the scope be sufficient to produce credible results, and the appraiser — not the client — is responsible for that determination.
Question 7: An appraiser who signs an appraisal report as a 'supervisory appraiser' is affirming that they:
- Personally performed all data collection and analysis in the report
- Supervised the trainee, reviewed the report, and accept full responsibility for the appraisal (Correct answer)
- Only reviewed the report for formatting and compliance with client guidelines
- Are licensed at a higher certification level than required for the assignment
Correct answer: Supervised the trainee, reviewed the report, and accept full responsibility for the appraisal
A supervisory appraiser's signature affirms supervision of the trainee, review of the work, and full co-responsibility for the appraisal.
USPAP USPAP General 4
USPAP Standards Rule 1-5 requires an appraiser to analyze agreements of sale, listings, and prior sales of the subject property.
How far back must the appraiser analyze prior sales?