USPAP 15-Hour Course Exam 171 Questions with Answers
The Preamble states that USPAP is - CORRECT ANSWER for appraisers and users of appraisal
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The stated purpose of USPAP - CORRECT ANSWER Promote and maintain a high level of public trust in appraisal practice.
When obligated by law or regulation an appraiser must - CORRECT ANSWER comply with USPAP.
USPAP applies to which types of properties? - CORRECT ANSWER Tangible and Intangible
Valuation services - CORRECT ANSWER is not a subset of appraisal practice.
An appraiser has the professional responsibility - CORRECT ANSWER to identify the capacity in which he or she is performing.
Reasons why an appraiser would prepare an appraisal assignment in conformance with USPAP - CORRECT ANSWER 1. Agreement with client.
2. Law or regulation.
3. Voluntary choice.
An appraiser who provides an appraisal service that is not an appraisal, appraisal review, or appraisal consulting assignment does not have workfile obligations associated with the assignment. - CORRECT ANSWER True
An individual is not prohibited from providing valuation services that involve advocacy while acting as an appraiser. - CORRECT ANSWER False
When performing valuation services outside of appraisal practice, appraisers must be careful not to _________________ the client and other intended users about their role. - CORRECT ANSWER Mislead
USPAP states that in a situation when an individual is not required by law, regulation, or agreement to comply with USPAP: - CORRECT ANSWER The individual should still comply when acting as an appraiser.
An appraiser is engaged to teach an appraisal course. What parts of USPAP apply? - CORRECT ANSWER The parts of USPAP that apply generally to appraisal practice.
The Appraisal Practices Board (APB) was created when? - CORRECT ANSWER 2010
The APB is a(n) - CORRECT ANSWER independent board.
Boards within The Appraisal Foundation (TAF) - CORRECT ANSWER 1. Board of Trustees (BOT)
2. Appraisal Standards Board (ASB)
3. Appraisal Qualifications Board (AQB)
4. Appraisal Practices Board (APB)
APB is a - CORRECT ANSWER private entity.
The APB has authority to enforce the requirements of USPAP. - CORRECT ANSWER False
Who has the only jurisdiction and authority over appraisers? - CORRECT ANSWER States
ASB - CORRECT ANSWER Develops, interprets, and amends USPAP.
Advisory opinions - CORRECT ANSWER Not part of USPAP; reference material only.
APB - CORRECT ANSWER Guidance is voluntary.
ASC - CORRECT ANSWER Maintains the official National Registry of state certified and licensed appraisers.
State appraisal regulatory committees - CORRECT ANSWER responsible for issuing credentials to individual appraisers.
Responsibilities of ASC: - CORRECT ANSWER • Establishes, improves, and promulgates the USPAP
• Subject, content, and substance of USPAP and other communication related to appraisal standards.
• Establishes standards of professional appraisal practice for the guidance and education of appraisers and users of appraisal services.
• Maintains the official National Registry of state certified and licensed appraisers.
Developing, amending, and interpreting USPAP is NOT a responsibility of - CORRECT ANSWER ASC
12. USPAP divides the appraisal process into two distinct types of activity: - CORRECT ANSWER Develop and report
Identify the problem - CORRECT ANSWER The first step in the appraisal process.
Communication - CORRECT ANSWER The reporting process involves ________________ of the appraiser's opinions and conclusions.
AQB - CORRECT ANSWER • Disseminates to state appraisal boards the qualifications criteria for appraiser certifications and recertification.
• Responsible for establishing education and experience requirements for licensing and certification of appraisers.
BOT - CORRECT ANSWER appoints members of the APB, AQB, ASB.
The ethical obligations of USPAP apply to - CORRECT ANSWER Individual appraisers.
Bias - CORRECT ANSWER is never allowed.
In appraisal practice, advocating the cause or interest of any party or issue is - CORRECT ANSWER never permitted.
If an appraiser has appraised a property multiple times within the prior 3 years he must disclose the number of times he appraised the property to a prospective client. - CORRECT ANSWER True
3 years - CORRECT ANSWER Prior to accepting an assignment, an appraiser must disclose any service he provided regarding the subject property for a period of
An appraiser has been asked to complete an appraisal assignment. The fee is to be paid when when the loan closes. According to USPAP, may the appraiser accept the assignment under the conditions? - CORRECT ANSWER No
The payment of fees by the appraiser in connection with the procurement of an assignment is - CORRECT ANSWER allowed if properly disclosed.
Confidential information is under USPAP is information the appraiser receives from - CORRECT ANSWER the client an dis identified as confidential, but is not available from other sources.
The disclosure of confidential information to a third party is unethical unless - CORRECT ANSWER authorized by the client.
Competency - CORRECT ANSWER fundamental to the definition of appraiser.
An appraiser must obtain the necessary competency prior to accepting the assignment. - CORRECT ANSWER False
In order to accept an assignment when an appraise initially lacks the knowledge and experience to complete an assignment competently he must - CORRECT ANSWER Disclose to the client, prior to accepting, the lack of knowledge or experience.
USPAP ________________ permit an appraiser to create a workfile after transmitting the report to the client. - CORRECT ANSWER does not
An appraiser prepared an appraisal report in April 2009. He testified in court regarding the value of the property in January 2010. The decision was rendered in February 2010 and was appealed in March 2010. The appellate court heard the case in January 2011 and remanded the case for reconsideration by the lower court final disposition of the case occurred in Sept 2011. At a minimum, how long must the appraiser retain his workfile? - CORRECT ANSWER April 2014
Three appraisers work together on an appraisal consulting assignment. What would NOT be an appropriate workfile arrangement under USPAP? - CORRECT ANSWER The workfile is posted on the internet,s o that anyone who wants to see it will be able to see it.
Trainer appraiser have the same workfile obligations under USPAP as certified or licensed appraisers. - CORRECT ANSWER True
An appraiser's peers - CORRECT ANSWER Others who have expertise and competency in a similar type of assignment.
Scope of Work in USPAP - CORRECT ANSWER The report must contain sufficient information so that intended users understand the scope of work.
Scope of work decision - CORRECT ANSWER Exclusion of an approach that is not necessary for credible, results in a given assignment.
Jurisdictional exception in an assignment - CORRECT ANSWER Identify the law, comply with the laws, disclose in the report the part of USPAP that is voided, and cite in the report the law that caused it.
Comply with the law or regulation - CORRECT ANSWER When a law or regulation precludes compliance with any part of USPAP, appraisers must.
Purpose of the Jurisdictional exclusion rule - CORRECT ANSWER To provide a saving or severability clause to preserve the balance of USPAP.
True - CORRECT ANSWER If USPAP compliance is mandated by federal law, no state or local law can create a jurisdictional exclusion.
Jurisdictional exclusion rule term "law" - CORRECT ANSWER Legislative law, court-made laws, and administrative rules and ordinances.
False - CORRECT ANSWER Appraisers cannot be expected to be aware of all of the laws and regulations that apply to a particular assignment.
False - CORRECT ANSWER The use of the jurisdictional exclusion rule in an assignment is a matter of choice by an appraiser.
False - CORRECT ANSWER A state passes a law requiring appraisers to keep their workfiles for 10 years after preparation. This is considered a jurisdictional exclusion under USPAP.
Jurisdictional exclusion example - CORRECT ANSWER A probate court paying appraisers based on the value of the subject.
Occurrence of a jurisdictional exclusion - CORRECT ANSWER It is automatic when a law precludes compliance with a part of USPAP.
6 Standard Rules - CORRECT ANSWER Standard 1 contains this many rules.
The development of a real (only) property appraisal. It mirrors the appraisal process and can be used as a conventional checklist. - CORRECT ANSWER Standard 1.
The requirements of Standard 1. - CORRECT ANSWER Used as a checklist by an appraiser who is developing a real property appraisal.
does not require - CORRECT ANSWER Standard 1 _________________ an appraiser to achieve perfection in developing a real property appraisal.
When the series of errors affects the credibility of the results. - CORRECT ANSWER When does a series of minor errors potentially result in a USPAP violation?
Consider whether the extent of the planned development process and report are still appropriate. - CORRECT ANSWER What should an appraiser do if, during the course of an assignment, becomes aware of a change in the intended use of the report?
This does not make the borrower an intended user. - CORRECT ANSWER If a borrower receives a copy of an appraisal report from a mortgage lender as a result of disclosure requirements:
An appraiser must document the client's identity in the workfile. - CORRECT ANSWER If a client wishes to remain anonymous the appraiser must:
Exposure time - CORRECT ANSWER Is always assumed to precede the effective date of the appraisal.
False - CORRECT ANSWER Identification of the intended use of an appraisers opinions and conclusions is not necessary in most appraisal assignments.
Identify the special financing to form and develop an opinion on their effect on value. - CORRECT ANSWER Special requirements when appraising the market value of a property subject to favorable financing.
To collect information about characteristics that are relevant to value. - CORRECT ANSWER The primary purpose of an appraiser making an inspection of the subject property.
True - CORRECT ANSWER When appraising proposed improvements, both current and prospective value opinions are permitted by USPAP.
The fact that the subject property is affected by an easement. - CORRECT ANSWER An example of a relevant property characteristic that could affect a real property appraisal assignment.
True - CORRECT ANSWER An appraiser may use an combination of a property inspection and documentation in identifying relevant characteristics of the subject property.
Hypothetical condition - CORRECT ANSWER When an appraiser provides a current value opinion on a proposed new building based upon the proposed improves are completed as of the effective date of the appraisal.
Extraordinary assumption - CORRECT ANSWER Only if required to develop credible results.
False - CORRECT ANSWER A research assignment, in which an appraiser completes research for a client but does not develop an opinion or conclusion, is not part of appraisal practice.
1. Limits the scope of work to the extent that the value opinion is not credible.
2. Precludes an appraiser's impartiality.
3. Limits report content, resulting in a misleading report. - CORRECT ANSWER Unacceptable assignment condition.
Step 3 - CORRECT ANSWER Date Collection and Analysis
Market Analysis - CORRECT ANSWER Demand Studies
Supply Studies
Marketability Studies
Highest and Best Use Analysis - CORRECT ANSWER Site as though vacant.
Ideal Improvement
Property as Improved
Step 4 - CORRECT ANSWER Application of the Approaches Value
Cost / Sales Comps / Income Captitalization
An assignment condition may require an appraiser to develop an approach that he or she would otherwise consider unnecessary. - CORRECT ANSWER USPAP and the 3 approaches to value.
The appraiser must analyze such data as are available to indicated value conclusion. - CORRECT ANSWER When developing a sales comp approach under USPAP.
Current Listings - CORRECT ANSWER When analyzing listings of the subject property in a real property appraisal assignment, USPAP requires, at a minimum, ___________to be analyzed.
Analyzed in the appraisal - CORRECT ANSWER If an appraiser is asked to appraise a property on which there is known, current agreement of sale, the agreement must be
All sales of the subject property that occurred within 3 years of the effective date of the appraisal. - CORRECT ANSWER When analyzing the subject property's sales history in a real property appraisal assignment, an appraiser is required by USPAP to analyze
Step 5 - CORRECT ANSWER Reconciliation of Value Indications and Final Opinions of Value
Careful consideration of the quality and quantity of data - CORRECT ANSWER The process of reconciliation entails
False - CORRECT ANSWER Standard Rules 1-5 require an appraiser to analyze the sales history of the comps
When such analysis is relevant to the current assignment - CORRECT ANSWER When is it necessary to analyze prior listings of the subject property in a real property appraisal assignment.
Step 6 - CORRECT ANSWER Report of Defined Value Opinions
Not required by Standard 2 - CORRECT ANSWER The use of standard appraisal reporting forms.
Standard 2 - CORRECT ANSWER Sets forth requirements for appraisal report content.
Summary
Self-Contained
Restricted Use - CORRECT ANSWER The 3 written report options stated in Standards Rule 2-2
The level of detail and information - CORRECT ANSWER The essential differences among the 3 reporting options.
Client's specific name - CORRECT ANSWER Not required by USPAP to be in a Summary Appraisal Report
Effective Date and Report Date - CORRECT ANSWER Must be included when reporting the results of an appraisal.
The date of the report - CORRECT ANSWER Establishes the appraiser's perspective on the market.
The exclusion of any of the valuation approaches - CORRECT ANSWER Must be explained in a Restricted Use Appraisal Report
Scope of work used to develop the appraisal must be summarized - CORRECT ANSWER In a Summary Appraisal Report
Must be stated and state that its use may have affected the assignment results. - CORRECT ANSWER An extraordinary assumption used in an appraisal,
False - CORRECT ANSWER A workfile is not required in support of a Restricted Use Appraisal Report
Equally credible - CORRECT ANSWER A value opinion expressed in a Summary Appraisal Report and a value opinion expressed in a Restricted Use Appraisal Report are
False - CORRECT ANSWER There can be intended users other than the client for a Restricted Use Appraisal Report.
Sign the certification - CORRECT ANSWER According to USPAP, any appraiser who signs any part of an appraisal report is required to
False - CORRECT ANSWER The disclosure of a significant real property appraisal assistance provided in an appraiser's report is not required under USPAP.
For the appraiser to acknowledge his/her ethical obligations. - CORRECT ANSWER The purpose of including a signed certification in an appraisal report.
True - CORRECT ANSWER A written summary of an oral appraisal report must be added to the appraiser's workfile within a reasonable time after the issuance of an oral report.
The appraiser must add a signed and dated certification to her appraisal workfile. - CORRECT ANSWER An appraiser provides an oral report of a real property appraisal assignment
Summary Appraisal Report - CORRECT ANSWER To the extent possible and appropriate, oral appraisal reports for real property must address the substantive matters that apply to this report.
True - CORRECT ANSWER A Recertification of Value does not change the effective date of the value opinion.
He is not permitted to "readdress" the report to Bank B. - CORRECT ANSWER An appraiser completes an appraisal for Bank A. Two months later, he is contacted by Bank B, who asks him to "readdress" his prior report to them....
New Assignment - CORRECT ANSWER If a client requests a more current valuation on a property that was the subject of a prior assignment, this is a
False - CORRECT ANSWER USPAP requires an appraiser to obtain a release from a previous client before appraising the same property for a new client.
The client is the only intended user - CORRECT ANSWER Restricted Use Appraisal Report
Not sign the certification - CORRECT ANSWER If a supervising appraiser makes changes to a trainee's report which the trainee does not agree with, the trainee should
communicating, developing - CORRECT ANSWER Appraisal review is the process of _______________ and ____________ an opinion about the quality of another appraiser's work performed as part of an appraisal, appraisal review, or appraisal consulting assignment.
Standards are paired - CORRECT ANSWER A major difference bewteen STANDARDS for real property appraisal review is?
One - CORRECT ANSWER How many STANDARDS address appraisal review?
True - CORRECT ANSWER A reviewer is required to identify the appraiser who completed the work under review, unless the identity has been withheld by the client.
Appraisal Review
Appraisal
Real Property Appraisal Consulting - CORRECT ANSWER Under STANDARD 3, what can be reviewed?
Not used as the basis to discredit the original appraiser's value opinion. - CORRECT ANSWER A review appraiser may use additional information that was not available to the original appraiser as long as the information is:
False - CORRECT ANSWER It is not permissible for a review appraiser to use an extraordinary assumption in a review assignment.
2-Stage - CORRECT ANSWER An appraisal review can be a _______________ assignment; an appraisal review and a value opinion by the reviewer.
False - CORRECT ANSWER An appraiser must develop an opinion regarding the qualifications of the appraiser whose work is under review.
STANDARD 1 - CORRECT ANSWER If an appraiser develops his own opinion of value, it must be developed under the requirements of _____________
Scope of Work - CORRECT ANSWER A reviewer who develops his own value opinion may use a different _____________ than that of the work under review.
Sufficient information, intended users - CORRECT ANSWER A reviewer is responsible for ensuring that there is _________________ in a review report so that it can be properly understood by ________________.
False - CORRECT ANSWER Under certain circumstances, a reviewer may use information that was not available to the original appraiser to dispute the work of the appraiser.
Must state this fact in the review report - CORRECT ANSWER If a client witholds the identity of the appraiser who completed the work under review, the reviewer
True - CORRECT ANSWER The reviewer performing an appraisal review must not sign the work under review unless he/she intends to accept the responsibility as a co-signor of the work.
A signed certification must be inserted into the workfile - CORRECT ANSWER If a reviewer provides an oral report of an appraisal review:
Reject the value conclusion as lacking credibility due to the errors and inconsistencies found. - CORRECT ANSWER Indicates a reviewer DID NOT develop his own opinion of value in an appraisal review assignment:
TRUE - CORRECT ANSWER A statement by a reviewer that "the value opinion stated in the appraisal report is not adequately supported" would be an indication that the reviewer DID NOT develop his or her own value opinion.
This is a 2-Stage Assignment - CORRECT ANSWER If an appraiser is asked to develop an opinion of the quality of another appraiser's work and to agree or disagree with the value conclusion:
Is not an opinion of value - CORRECT ANSWER An appraisal consulting assignment:
Determine the quality of another appraiser's work - CORRECT ANSWER An appraisal consulting assignment does not
specific - CORRECT ANSWER There are no __________ reporting options for written real property appraisal consulting reports.
Intended use and intended users - CORRECT ANSWER The appropriate level of information in a real property appraisal consulting report is dictated by
Both real and personal property - CORRECT ANSWER STANDARD 6, Mass Appraisal, applies to:
STANDARD 3 - CORRECT ANSWER STANDARD 6 is most similar in structure to:
It serves as an appraiser's acknowledgement of his/her ethical obligations. - CORRECT ANSWER In a written appraisal report prepared under STANDARD 6, what is the purpose of a signed certification?
Notifications and not reports - CORRECT ANSWER Notifications sent to property owners of the results of a mass appraisal, which may be required by public policy, are considered
STANDARDS 1 and 2 - CORRECT ANSWER An appraiser is engaged by her local count assessment board to complete an appraisal of an apartment building for ad valoram taxation purposes, which USPAP STANDARDS apply to the assignment?
The objects that are most significant to the assignment results should be the focus of the analysis. - CORRECT ANSWER In a personal property appraisal assignment that includes multiple objects as part of the same assignment:
A reasonable and applicable time - CORRECT ANSWER When appraising personal property, the appraiser must analyze prior sales of the subject over what time period?
trade, different comparable data - CORRECT ANSWER There are distinct levels of __________ in personal property, and each may have _______________.
3 - CORRECT ANSWER Under STANDARD 8, a personal property appraiser has _________ different report options.
All oral and written reports covered in USPAP - CORRECT ANSWER Which reports require a signed certification?
Appraisal Report or Restricted Use Appraisal Report - CORRECT ANSWER A written business appraisal report must be prepared in accordance with:
Oral appraisal report - CORRECT ANSWER An appraiser is permitted under USPAP to provide an __________of a business enterprise.
Contain a reference to the inspection of the subject property. - CORRECT ANSWER An appraiser's certification in business or intangible asset appraisal report does not:
Clarify, explain, or elaborate on a Rule or Standards Rule - CORRECT ANSWER What is the purpose of Statements on Appraisal Standards in USPAP?
The Statement is applicable to all appraisal disciplines. - CORRECT ANSWER What is indicated if a Statement on Appraisal Standards is labeled with "ALL"?
The Statement is applicable to real property appraisal. - CORRECT ANSWER What is indicated if a Statement on Appraisal Standards is labeled with "RP"?
The name and version of the software program. - CORRECT ANSWER If an appraiser uses a commercial software program for Discounted Cash Flow (DCF) Analysis in an appraisal, what should the appraiser provide in the report?
Be tested an checked for errors and reasonableness. - CORRECT ANSWER The results of DCF Analysis should:
A prospective appraisal - CORRECT ANSWER Developing an opinion of value of a property as of a specific future date is:
The context of the market conditions for the appraiser's opinion. - CORRECT ANSWER What does the effective date of an appraisal establish?
Retrospective - CORRECT ANSWER What type of appraisal would be indicated by the phrase, "the market value of the subject property was $200,000?
NOT - CORRECT ANSWER An appraiser who values an environmentally contaminated property is ________ required by the Competency Rule to be an expert in the scientific aspects of contamination.
Should include explanation that provides context. - CORRECT ANSWER In an appraisal report, the use of terms that reflect a scale such as "good" or "average".
Prohibited - CORRECT ANSWER The use of supported conclusions related to race, color, or religion in an appraisal may be ________________ by applicable law.
beyond typical residential appraisal competency - CORRECT ANSWER The competency required to appraise subsidized housing extends:
Not consistent with market value - CORRECT ANSWER A value opinion developed to reflect the most probable price under a forced sale condition is:
Not an appraisal, an no workfile is required - CORRECT ANSWER An appraiser provides raw AVM output to a lender. The is:
not interchangeable - CORRECT ANSWER All market value definitions are:
Assignment conditions - CORRECT ANSWER Laws and regulations that apply to an appraisal for a federally regulated lending transaction would be considered:
FALSE - CORRECT ANSWER Appraisals for federally regulated financial institutions often involve the use of the Jurisdictional Exception Rule.
That the lender must engage the appraiser, and the appraiser cannot late "readdress" the report. - CORRECT ANSWER If a borrower attempts to engage an appraiser to complete an appraisal for a federally regulated lending transaction, the appraiser should disclose: [Show Less]