USPAP USPAP General 5 — Questions and Answers
Question 1: Under USPAP, when is it permissible to perform an appraisal without physically inspecting the property?
- Never; USPAP requires a personal inspection for all assignments
- When the scope of work determination supports it and the limitation is disclosed in the report (Correct answer)
- Only for properties valued under $250,000
- Only when the client provides a certified property description
Correct answer: When the scope of work determination supports it and the limitation is disclosed in the report
USPAP allows desktop or drive-by appraisals if the scope of work supports it and the inspection limitation is disclosed.
Question 2: The USPAP certification required in every appraisal report must include a statement that:
- The appraiser has no financial interest in the property
- The reported analyses, opinions, and conclusions are the appraiser's own impartial professional analysis (Correct answer)
- The property was physically inspected by the appraiser
- The appraisal fee was not contingent on a minimum value
Correct answer: The reported analyses, opinions, and conclusions are the appraiser's own impartial professional analysis
The certification must affirm that the analyses, opinions, and conclusions are the appraiser's own impartial professional work.
Question 3: Under USPAP Standards Rule 1-4, when developing a real property appraisal, an appraiser must, at minimum:
- Apply all three approaches to value in every assignment
- Collect, verify, and analyze all information necessary for credible assignment results (Correct answer)
- Use only sales comparison for residential and income for commercial properties
- Personally verify all comparable sales data with the listing agent
Correct answer: Collect, verify, and analyze all information necessary for credible assignment results
SR 1-4 requires the appraiser to collect, verify, and analyze all information necessary to produce credible results, using the approaches relevant to the assignment.
Question 4: A client asks an appraiser to change a value conclusion after delivery of the report. The appraiser may change the conclusion only if:
- The client is willing to pay an additional fee for the revision
- The appraiser is provided new information or identifies an error that, upon re-analysis, supports a different conclusion (Correct answer)
- The changed conclusion is within 5% of the original conclusion
- The lender approves the value change in writing
Correct answer: The appraiser is provided new information or identifies an error that, upon re-analysis, supports a different conclusion
An appraiser may only revise a conclusion if new information or a discovered error, upon proper re-analysis, legitimately supports a different value.
Question 5: USPAP requires that when an appraiser uses the income approach, they must analyze:
- Only actual rents currently being collected on the subject property
- Market-derived income and expense data appropriate to the property type and assignment conditions (Correct answer)
- Income data provided exclusively by the property owner
- Published IRS depreciation tables to estimate net income
Correct answer: Market-derived income and expense data appropriate to the property type and assignment conditions
The income approach must rely on market-derived income and expense data, not solely owner-provided figures, to produce a credible value opinion.
Question 6: Which USPAP provision specifically addresses the appraiser's obligation when they discover, after completing an assignment, that the report contains a significant error?
- The Competency Rule requires immediate withdrawal from all future assignments
- The Ethics Rule – Conduct section requires the appraiser to take steps to correct the report and notify the client (Correct answer)
- USPAP does not address post-delivery errors; only state law applies
- The Record Keeping Rule requires annotation of the error in the workfile only
Correct answer: The Ethics Rule – Conduct section requires the appraiser to take steps to correct the report and notify the client
The Conduct section of the Ethics Rule requires an appraiser who discovers a significant error to take corrective action and notify the client.
Question 7: An 'exposure time' estimate in a USPAP-compliant appraisal report refers to:
- The time the property was listed before the appraisal inspection
- The estimated length of time the subject property would have been on the market prior to the effective date to achieve the appraised value (Correct answer)
- The time allowed for the borrower to review the appraisal before closing
- The period during which market conditions may change after the effective date
Correct answer: The estimated length of time the subject property would have been on the market prior to the effective date to achieve the appraised value
Exposure time is the estimated marketing period that precedes the effective date, reflecting how long the property would need to be listed to sell at the appraised value.
USPAP USPAP General 5
Under USPAP, when is it permissible to perform an appraisal without physically inspecting the property?