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USPAP contains many sections. Which of the following is not technically considered part of the USPAP document?
b. Advisory Opinions
c. Statements on Appraisal Standards
(b) Currently the USPAP document contains the Definitions, Preamble, Rules, Standards, Standards Rules, Comments, and Statements on Appraisal Standards. In addition, the USPAP document also includes the Advisory Opinions (AOs), but these are not technically part of USPAP. Page 168
Why is it necessary for the PREAMBLE, DEFINITIONS, and Rules sections to precede the Standards?
a. Because they are required for understanding the Standards
b. Because they define a Standard
c. Because they explain the difference between Standards and Standards Rules
d. None of the above
(a) The three sections precede the Standards because the information is relevant and required for understanding and following the Standards. Page 168
Regarding the Standards, which of the following statements is most correct?
a. USPAP covers real estate appraisal only
b. Some standards deal with aspects of appraisal that are not real estate related
c. Most beginning appraisers need only concern themselves with STANDARDS 1-5
d. The comments found within the Standards are less than the Standards themselves
(b) When USPAP was developed, its creators decided to encompass all appraisal disciplines, but Standards 1 & 2 are the ones that a beginning real estate appraiser will need to use. Page 169
Which of the following illustrates the applicability of Standards in specific situations and offers advice from the ASB for the resolution of appraisal issues and problems?
b. Statements on Appraisal Standards
c. Advisory Opinions
(c) Advisory Opinions are issued to illustrate the applicability of Standards in specific situations and to offer advice from the ASB for the resolution of appraisal issues and problems; they are guidance only and are not considered an integral part of USPAP. Page 170
Every appraisal discipline encompassed within the USPAP has two Standards associated with it except two. Which two appraisal disciplines are these?
a. Appraisal Review and Appraisal Consulting
b. Mass Appraisal and Appraisal review
c. Business Appraisal and Personal Property Appraisal
d. Real Property Appraisal and Personal Property Appraisal
(b) Real Property Appraisal (Standards 1 and 2)
Appraisal Review (Standard 3)
Appraisal Consulting (Standards 4 and 5)
Mass Appraisal (Standard 6)
Personal Property Appraisal (Standards 7 and 8)
Business Appraisal (Standards 9 and 10)
Pages 170 - 174
Which of the following is a requirement of STANDARD 2: Real Property Appraisal, Reporting?
a. An appraiser must not commit a substantial error of omission or commission
b. An appraiser must not render appraisal services in a careless or negligent manner
c. An appraiser must clearly and accurately set forth the appraisal in a manner that will not be misleading
d. An appraiser must be impartial and unbiased, and may not act as an advocate
(c) When reporting a real estate appraisal, the appraiser must "clearly and accurately set forth the appraisal in a manner that will not be misleading". Page 171
Which of the following is not a report option recognized by the USPAP?
a. Limited-Use Appraisal Report
b. Self-Contained Appraisal Report
c. Restricted-Use Appraisal Report
d. Summary Appraisal Report
(a) In addition to the rules that govern report clarity and content, Standard 2 also provides three reporting options: Self-Contained, Summary, and Restricted Use. Page 171
When an appraiser is contracted to develop an opinion regarding another real estate appraiser's work as well as develop his or her own value opinion of the subject property, this assignment is:
a. a review appraisal
b. an appraisal consulting assignment
c. a mass appraisal
d. a review appraisal and a real estate appraisal
(d) Standard 3 gives the review appraiser the option to develop his or her own value opinion based on the information in the original workfile. However, once the appraiser does this, the assignment becomes two-fold: a new appraisal as well as a review assignment, producing two reports. Page 173
Bill is hired to appraise a residence and all of its contents, including appliances and furniture. Which of the following is true?
a. This appraisal assignment includes personal property
b. Bill should contact an experienced appraiser if Bill has never appraised furniture and appliances before
c. This assignment is considered a mass appraisal because it encompasses several different disciplines
d. Both a. and b.
(d) Personal property includes all tangible assets that are not real property, such as jewelry, autos, boats, etc. The appraiser must be fully competent in the type of property he or she is appraising, or take the steps necessary to gain competency. Page 174 & 177
A lender hired Nora to appraise Jim's retail store because Jim is using the store as collateral for taking out a loan to purchase a warehouse. This is an example of a:
a. business appraisal
b. personal property appraisal
c. real property appraisal
d. none of the above
(c) Nora is appraising the building - not the intangible assets of the business such as a logo or copyright. This assignment is a real property appraisal. Page 174
The ETHICS RULE is divided into for subsections. These sections are called:
a. Conduct, Management, Confidentiality, and Competency
b. Conduct, Management, Competency, and Record keeping
c. Confidentiality, Management, Competency, and Record Keeping
d. Conduct, Management, Confidentiality, and Record Keeping
(d) The Ethics Rule is divided into four sections: Conduct, Management, Confidentiality, and Record Keeping. Page 175
According to the Conduct section of the ETHICS RULE, when is advocacy acceptable.
a. When acting as an appraiser
b. When working in non-appraisal related professions
c. When buying or selling property for a client
d. Both b. and c.
(d) The Conduct section forbids an appraiser to act as an advocate. Many appraisers are also real estate salespeople, real estate brokers, lawyers, etc. and are required to be advocates as part of their non-appraisal duties. Advocacy is acceptable within those roles. Page 175
Kelly accepts an assignment that stipulates she will be paid of the appraised value comes in above $300,000. This assignment is:
a. permitted within the context of USPAP
b. prohibited by the Management section of the ETHICS RULE
c. permitted if the fees are disclosed properly
d. prohibited by the JURISDICTIONAL EXCEPTION RULE
(b) The Management section prohibits accepting an assignment where the fee is contingent on a predetermined or future result. Page 175
Ezekiel completed an appraisal for Popular Bank on December 13th of 2005. According to the record keeping section, when is the soonest he will be able to dispose of the files?
d. 12/13/2010 assuming there are no judicial proceedings involving this appraisal
(d) An appraiser must keep his workfiles for at least five years or two years after final disposition of any judicial proceeding involving the file. Page 176
Which of the following is not a scheme that may entangle an appraiser in mortgage fraud?
a. Lender pressure
c. Packaged sale
d. Bogus sale
(c) Some of the most common fraud schemes include flipping, packed sales, bogus sales, and lender pressure. Pages 181 - 183