After an appraisal subject to specified repairs, a client asks only whether those repairs have been completed. No new value opinion is requested. Which statement is most accurate?
Correct Answer
B) Verifying completion alone does not develop a new current value opinion
Confirming whether specified conditions were satisfied is different from developing an opinion of value for a new effective date. The appraiser should define the requested service and engagement terms, report the observations and conclusions accurately, and comply with the USPAP obligations and any program requirements applicable to that service. Completion verification alone does not update the earlier value. If a current value opinion is requested, that is a new appraisal assignment.
Why This Is the Correct Answer
Option B is correct because verifying whether specified repairs were completed does not develop a new current value opinion. An appraisal is the act or process of developing an opinion of value, and no new value is requested here. If a current value opinion is wanted, that is a new appraisal assignment.
Why the Other Options Are Wrong
Option A: The request updates the earlier value to the inspection date
Option A says the request updates the earlier value to the inspection date. A completion check confirms conditions but does not develop a value opinion as of the inspection date.
Option C: The request is an appraisal review of the earlier report
Option C says the request is an appraisal review of the earlier report. An appraisal review develops an opinion about the quality of another appraiser's work, which is not what a repair-completion check does.
Option D: The original effective date may be moved forward without new analysis
Option D says the original effective date may be moved forward without new analysis. Moving the effective date would require developing a new value opinion, which is a new assignment requiring analysis.
Checking Is Not Valuing
Confirming repairs answers yes or no about conditions; it does not produce a new value.
How to use: Use this to separate completion verifications from value updates.
Exam Tip
Look for whether a new value opinion is requested. If not, the service does not update the earlier value.
Common Mistakes to Avoid
- -Believing a completion check re-dates the original value
- -Calling a completion verification an appraisal review
- -Moving the effective date forward without analysis
Concept Deep Dive
Analysis
This question tests the difference between verifying completion of repairs and developing a new value opinion. An appraisal is the act of developing an opinion of value, so confirming conditions without a value opinion does not update the earlier value. The effective date of the original appraisal does not change through a completion check.
Background Knowledge
Appraisals made subject to repairs often lead to a later completion verification. That service confirms whether the specified conditions have been met and reports the observations, but it does not develop a new value. A new value opinion as of a later date is a new appraisal assignment.
Real-World Application
An appraisal for a purchase loan was made subject to replacing a damaged roof. After the work, the lender asks the appraiser only to confirm the new roof is installed. The appraiser inspects, reports that the repairs were completed with photos, and makes no new value conclusion.
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