A lender orders an appraisal and the borrower pays for it at closing. The borrower is:
Correct Answer
B) Not automatically an intended user — paying is not the same as engaging
Why this is correct: The 'client' is the party that engages the appraiser. The borrower paying the fee is a common arrangement in lending, but it does not automatically make the borrower a client or an intended user. Intended users are identified at the time of engagement. Why the other choices are wrong: 'Automatically an intended user because the borrower paid the fee' confuses payment with engagement. 'An intended user only for the property description section of the report' is incorrect; intended user status applies to the entire report, not sections. 'The client, since the funds for the appraisal came from the borrower' is wrong; the lender who ordered the appraisal is typically the client. Exam tip: Client = who hired you. Payment source does not change that.
Why This Is the Correct Answer
Why this is correct: The 'client' is the party that engages the appraiser. The borrower paying the fee is a common arrangement in lending, but it does not automatically make the borrower a client or an intended user. Intended users are identified at the time of engagement. Why the other choices are wrong: 'Automatically an intended user because the borrower paid the fee' confuses payment with engagement. 'An intended user only for the property description section of the report' is incorrect; intended user status applies to the entire report, not sections. 'The client, since the funds for the appraisal came from the borrower' is wrong; the lender who ordered the appraisal is typically the client. Exam tip: Client = who hired you. Payment source does not change that.
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
If an appraiser uses a hypothetical condition that the subject property is 10% larger than it actually is, this must be:
Under Standard 1, when developing a real property appraisal, an appraiser must:
An appraiser accepts an assignment to appraise a specialized industrial property but has never appraised this property type before. To comply with the Competency Rule, the appraiser:
According to the Scope of Work Rule, the scope of work must be appropriate to the:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
A lender emails: 'We need at least $450,000 to make this loan work — can you take the assignment?' Accepting on that basis is:
An appraiser is developing an opinion of market value for a 20-unit apartment building. The appraiser finds three comparable sales with the following information: Sale 1: 18 units, sold for $1,800,000; Sale 2: 22 units, sold for $2,200,000; Sale 3: 24 units, sold for $2,280,000. What is the average price per unit for these comparables?
In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
People Also Study
Valuation Principles & Procedures
25% of exam
Property Description & Analysis
20% of exam
Market Analysis & Highest/Best Use
15% of exam
Appraisal Math & Statistics
15% of exam
Report Writing & Compliance
10% of exam