USPAP Vocabulary

Card Set Information

Author:
RFD
ID:
16405
Filename:
USPAP Vocabulary
Updated:
2010-04-27 06:29:32
Tags:
USPAP
Folders:

Description:
Definitions in USPAP
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user RFD on FreezingBlue Flashcards. What would you like to do?


  1. APPRAISAL
    (noun) the act or process of developing an opinion of value; an opinion of value.

    (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.

    Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value).
  2. APPRAISAL CONSULTING
    the act or process of developing an analysis, recommendation, or opinion to solve a problem, where an opinion of value is a component of the analysis leading to the assignment results.

    Comment: An appraisal consulting assignment involves an opinion of value but does not have an appraisal or an appraisal review as its primary purpose.
  3. APPRAISAL PRACTICE
    valuation services performed by an individual acting as an appraiser, including but not limited to appraisal, appraisal review, or appraisal consulting.

    Comment: Appraisal practice is provided only by appraisers, while valuation services are provided by a variety of professionals and others. The terms appraisal, appraisal review, and appraisal consulting are intentionally generic and are not mutually exclusive. For example, an opinion of value may be required as part of an appraisal review and is required as a component of the analysis in an appraisal consulting assignment. The use of other nomenclature for an appraisal, appraisal review, or appraisal consulting assignment (e.g., analysis, counseling, evaluation, study, submission, or valuation) does not exempt an appraiser from adherence to the Uniform Standards of Professional Appraisal Practice.
  4. APPRAISAL REVIEW
    the act or process of developing and communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal, appraisal review, or appraisal consulting assignment.

    Comment: The subject of an appraisal review assignment may be all or part of a report, workfile, or a combination of these.
  5. APPRAISER
    one who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.

    Comment: Such expectation occurs when individuals, either by choice or by requirement placed upon them or upon the service they provide by law, regulation, or agreement with theclient or intended users, represent that they comply.1

    1 See PREAMBLE and Advisory Opinion 21, USPAP Compliance.
  6. APPRAISER’S PEERS
    other appraisers who have expertise and competency in a similar type of assignment.
  7. ASSIGNMENT
    1) An agreement between an appraiser and a client to provide a valuation service;

    2) the valuation service that is provided as a consequence of such an agreement.
  8. ASSIGNMENT RESULTS
    an appraiser’s opinions and conclusions developed specific to an assignment.

    • Comment: Assignment results include an appraiser’s:
    • opinions or conclusions developed in an appraisal assignment, such as value;
    • opinions of adequacy, relevancy, or reasonableness developed in an appraisal review assignment; or
    • opinions, conclusions, or recommendations developed in an appraisal consulting assignment.
  9. ASSUMPTION
    that which is taken to be true.
  10. BIAS
    a preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment.
  11. BUSINESS ENTERPRISE
    an entity pursuing an economic activity.
  12. BUSINESS EQUITY
    the interests, benefits, and rights inherent in the ownership of a business enterprise or a part thereof in any form (including, but not necessarily limited to, capital stock, partnership interests, cooperatives, sole proprietorships, options, and warrants).
  13. CLIENT
    the party or parties who engage an appraiser (by employment or contract) in a specific assignment.

    Comment: The client identified by the appraiser in an appraisal, appraisal review, or appraisal consulting assignment (or in the assignment workfile) is the party or parties with whom the appraiser has an appraiser-client relationship in the related assignment, and may be an individual, group, or entity.
  14. CONFIDENTIAL INFORMATION
    information that is either:

     identified by the client as confidential when providing it to an appraiser and that is not available from any other source; or classified as confidential or private by applicable law or regulation*.

    *NOTICE: For example, pursuant to the passage of the Gramm-Leach-Bliley Act in November 1999, some public agencies have adopted privacy regulations that affect appraisers. As a result, the Federal Trade Commission issued a rule focused on the protection of “non-public personal information” provided by consumers to those involved in financial activities “found to be closely related to banking or usual in connection with the transaction of banking.” These activities have been deemed to include “appraising real or personal property.” (Quotations are from the Federal Trade Commission, Privacy of Consumer Financial Information; Final Rule, 16 CFR Part 313.)
  15. COST
    the amount required to create, produce, or obtain a property.

    Comment: Cost is either a fact or an estimate of fact.
  16. CREDIBLE
    worthy of belief.
  17. Comment: Credible assignment results require support, by relevant evidence and logic, to the degree necessary for the intended use.
  18. EXTRAORDINARY ASSUMPTION
    an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s opinions or conclusions.

    Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.
  19. FEASIBILITY ANALYSIS
    a study of the cost-benefit relationship of an economic endeavor.
  20. HYPOTHETICAL CONDITION
    that which is contrary to what exists but is supposed for the purpose of analysis.

    Comment: Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.
  21. INTANGIBLE PROPERTY (INTANGIBLE ASSETS)
    nonphysical assets, including but not limited to franchises, trademarks, patents, copyrights, goodwill, equities, securities, and contracts as distinguished from physical assets such as facilities and equipment.
  22. INTENDED USE
    the use or uses of an appraiser’s reported appraisal, appraisal review, or appraisal consulting assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment.
  23. INTENDED USER
    the client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report by the appraiser on the basis of communication with the client at the time of the assignment.
  24. JURISDICTIONAL EXCEPTION
    an assignment condition established by applicable law or regulation, which precludes an appraiser from complying with a part of USPAP.
  25. MARKET VALUE
    a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal.

    Comment: Forming an opinion of market value is the purpose of many real property appraisal assignments, particularly when the client’s intended use includes more than one intended user.The conditions included in market value definitions establish market perspectives for development of the opinion. These conditions may vary from definition to definition but generally fall into three categories:

    • 1. the relationship, knowledge, and motivation of the parties (i.e., seller and buyer);109
    • 2. the terms of sale (e.g., cash, cash equivalent, or other terms); and
    • 3. the conditions of sale (e.g., exposure in a competitive market for a reasonable time prior to sale).

    Appraisers are cautioned to identify the exact definition of market value, and its authority, applicable in each appraisal completed for the purpose of market value.
  26. MASS APPRAISAL
    the process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing.
  27. MASS APPRAISAL MODEL
    a mathematical expression of how supply and demand factors interact in a market.
  28. PERSONAL PROPERTY
    identifiable tangible objects that are considered by the general public as being “personal” - for example, furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and equipment; all tangible property that is not classified as real estate.
  29. PRICE
    the amount asked, offered, or paid for a property.

    Comment: Once stated, price is a fact, whether it is publicly disclosed or retained in private.Because of the financial capabilities, motivations, or special interests of a given buyer or seller, the price paid for a property may or may not have any relation to the value that might be ascribed to that property by others.
  30. REAL ESTATE
    an identified parcel or tract of land, including improvements, if any.
  31. REAL PROPERTY
    the interests, benefits, and rights inherent in the ownership of real estate.

    Comment: In some jurisdictions, the terms real estate and real property have the same legal meaning. The separate definitions recognize the traditional distinction between the two concepts in appraisal theory.
  32. REPORT
    any communication, written or oral, of an appraisal, appraisal review, or appraisal consulting service that is transmitted to the client upon completion of an assignment

    Comment: Most reports are written and most clients mandate written reports. Oral report requirements (see the Record Keeping section of the ETHICS RULE) are included to cover court testimony and other oral communications of an appraisal, appraisal review, or appraisal consulting service.
  33. SCOPE OF WORK
    the type and extent of research and analyses in an assignment.
  34. SIGNATURE
    personalized evidence indicating authentication of the work performed by the appraiser and the acceptance of the responsibility for content, analyses, and the conclusions in the report.
  35. VALUATION SERVICES
    services pertaining to aspects of property value.

    Comment: Valuation services pertain to all aspects of property value and include services performed both by appraisers and by others.
  36. VALUE
    the monetary relationship between properties and those who buy, sell, or use those properties.

    Comment: Value expresses an economic concept. As such, it is never a fact but always an opinion of the worth of a property at a given time in accordance with a specific definition of value. In appraisal practice, value must always be qualified - for example, market value, liquidation value, or investment value.
  37. WORKFILE
    documentation necessary to support an appraiser’s analyses, opinions, and conclusions

What would you like to do?

Home > Flashcards > Print Preview