USPAP 15-Hour Course

The Preamble states that USPAP is

for appraisers and users of appraisal services.

The stated purpose of USPAP

Promote and maintain a high level of public trust in appraisal practice.

When obligated by law or regulation an appraiser must

comply with USPAP.

USPAP applies to which types of properties?

Tangible and Intangible

Valuation services

is not a subset of appraisal practice.

An appraiser has the professional responsibility

to identify the capacity in which he or she is performing.

Reasons why an appraiser would prepare an appraisal assignment in conformance with USPAP

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.

True

An individual is not prohibited from providing valuation services that involve advocacy while acting as an appraiser.

False

When performing valuation services outside of appraisal practice, appraisers must be careful not to _________________ the client and other intended users about their role.

Mislead

USPAP states that in a situation when an individual is not required by law, regulation, or agreement to comply with USPAP:

The individual should still comply when acting as an appraiser.

An appraiser is engaged to teach an appraisal course. What parts of USPAP apply?

The parts of USPAP that apply generally to appraisal practice.

The Appraisal Practices Board (APB) was created when?

2010

The APB is a(n)

independent board.

Boards within The Appraisal Foundation (TAF)

1. Board of Trustees (BOT)

2. Appraisal Standards Board (ASB)

3. Appraisal Qualifications Board (AQB)

4. Appraisal Practices Board (APB)

APB is a

private entity.

The APB has authority to enforce the requirements of USPAP.

False

Who has the only jurisdiction and authority over appraisers?

States

ASB

Develops, interprets, and amends USPAP.

Advisory opinions

Not part of USPAP; reference material only.

APB

Guidance is voluntary.

ASC

Maintains the official National Registry of state certified and licensed appraisers.

State appraisal regulatory committees

responsible for issuing credentials to individual appraisers.

Responsibilities of ASC:

• 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

ASC

12. USPAP divides the appraisal process into two distinct types of activity:

Develop and report

Identify the problem

The first step in the appraisal process.

Communication

The reporting process involves ________________ of the appraiser's opinions and conclusions.

AQB

• 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

appoints members of the APB, AQB, ASB.

The ethical obligations of USPAP apply to

Individual appraisers.

Bias

is never allowed.

In appraisal practice, advocating the cause or interest of any party or issue is

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.

True

3 years

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?

No

The payment of fees by the appraiser in connection with the procurement of an assignment is

allowed if properly disclosed.

Confidential information is under USPAP is information the appraiser receives from

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

authorized by the client.

Competency

fundamental to the definition of appraiser.

An appraiser must obtain the necessary competency prior to accepting the assignment.

False

In order to accept an assignment when an appraise initially lacks the knowledge and experience to complete an assignment competently he must

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.

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?

April 2014

Three appraisers work together on an appraisal consulting assignment. What would NOT be an appropriate workfile arrangement under USPAP?

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.

True

An appraiser's peers

Others who have expertise and competency in a similar type of assignment.

Scope of Work in USPAP

The report must contain sufficient information so that intended users understand the scope of work.

Scope of work decision

Exclusion of an approach that is not necessary for credible, results in a given assignment.

Jurisdictional exception in an assignment

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

When a law or regulation precludes compliance with any part of USPAP, appraisers must.

Purpose of the Jurisdictional exclusion rule

To provide a saving or severability clause to preserve the balance of USPAP.

True

If USPAP compliance is mandated by federal law, no state or local law can create a jurisdictional exclusion.

Jurisdictional exclusion rule term "law"

Legislative law, court-made laws, and administrative rules and ordinances.

False

Appraisers cannot be expected to be aware of all of the laws and regulations that apply to a particular assignment.

False

The use of the jurisdictional exclusion rule in an assignment is a matter of choice by an appraiser.

False

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

A probate court paying appraisers based on the value of the subject.

Occurrence of a jurisdictional exclusion

It is automatic when a law precludes compliance with a part of USPAP.

6 Standard Rules

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.

Standard 1.

The requirements of Standard 1.

Used as a checklist by an appraiser who is developing a real property appraisal.

does not require

Standard 1 _________________ an appraiser to achieve perfection in developing a real property appraisal.

When the series of errors affects the credibility of the results.

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.

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.

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.

If a client wishes to remain anonymous the appraiser must:

Exposure time

Is always assumed to precede the effective date of the appraisal.

False

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.

Special requirements when appraising the market value of a property subject to favorable financing.

To collect information about characteristics that are relevant to value.

The primary purpose of an appraiser making an inspection of the subject property.

True

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.

An example of a relevant property characteristic that could affect a real property appraisal assignment.

True

An appraiser may use an combination of a property inspection and documentation in identifying relevant characteristics of the subject property.

Hypothetical condition

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

Only if required to develop credible results.

False

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.

Unacceptable assignment condition.

Step 3

Date Collection and Analysis

Market Analysis

Demand Studies

Supply Studies

Marketability Studies

Highest and Best Use Analysis

Site as though vacant.

Ideal Improvement

Property as Improved

Step 4

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.

USPAP and the 3 approaches to value.

The appraiser must analyze such data as are available to indicated value conclusion.

When developing a sales comp approach under USPAP.

Current Listings

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

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.

When analyzing the subject property's sales history in a real property appraisal assignment, an appraiser is required by USPAP to analyze

Step 5

Reconciliation of Value Indications and Final Opinions of Value

Careful consideration of the quality and quantity of data

The process of reconciliation entails

False

Standard Rules 1-5 require an appraiser to analyze the sales history of the comps

When such analysis is relevant to the current assignment

When is it necessary to analyze prior listings of the subject property in a real property appraisal assignment.

Step 6

Report of Defined Value Opinions

Not required by Standard 2

The use of standard appraisal reporting forms.

Standard 2

Sets forth requirements for appraisal report content.

Summary

Self-Contained

Restricted Use

The 3 written report options stated in Standards Rule 2-2

The level of detail and information

The essential differences among the 3 reporting options.

Client's specific name

Not required by USPAP to be in a Summary Appraisal Report

Effective Date and Report Date

Must be included when reporting the results of an appraisal.

The date of the report

Establishes the appraiser's perspective on the market.

The exclusion of any of the valuation approaches

Must be explained in a Restricted Use Appraisal Report