A Restricted Appraisal Report must conspicuously warn the reader of which limitation?
Correct Answer
B) It may not contain the rationale supporting conclusions
A Restricted Appraisal Report must conspicuously warn that supporting rationale for all opinions and conclusions may not appear in the report. This warning does not mean no supporting rationale is needed or that the workfile may be deficient.
Why This Is the Correct Answer
Option B is correct because USPAP requires a Restricted Appraisal Report to clearly and conspicuously warn that the report may not contain supporting rationale for all of the opinions and conclusions set forth in it. This tells readers the brevity is a reporting choice. It does not mean the appraiser skipped the supporting analysis or that the workfile may be deficient.
Why the Other Options Are Wrong
Option A: The value opinion has not been independently reviewed
Option A is wrong because a statement that the value opinion has not been independently reviewed is not a required Restricted Appraisal Report warning. Appraisal review is a separate assignment type.
Option C: The appraiser has not inspected the subject property
Option C is wrong because the required warning is not about whether the appraiser inspected the subject property. Inspection is a scope-of-work matter that applies to any report option, not the special restricted-report warning.
Option D: The client may not disclose it to any third parties
Option D is wrong because the required warning does not say the client may not disclose the report to any third parties. The restricted report limits use to the client and named intended users, which is different from a ban on client disclosure.
Restricted means reasons may be missing
A Restricted Appraisal Report is a short note to insiders, so it must warn that the reasons behind the conclusions may not all be written down.
How to use: Use this to pick the warning about absent supporting rationale when asked what a Restricted Appraisal Report must disclose.
Exam Tip
Look for wording about supporting rationale possibly not appearing in the report; that is the hallmark warning of the Restricted Appraisal Report.
Common Mistakes to Avoid
- -Thinking the warning means no supporting analysis is needed
- -Confusing the warning with a ban on the client sharing the report
- -Assuming the warning concerns inspection status
Concept Deep Dive
Analysis
This question tests the specific warning USPAP requires in a Restricted Appraisal Report. Because this report option can be brief, readers must be told that the supporting reasoning may not all appear in the report. Match the option to that required warning.
Background Knowledge
USPAP offers two written real property report options: the Appraisal Report and the Restricted Appraisal Report. The restricted option has limited content, so USPAP requires a use restriction and a conspicuous warning about possibly missing rationale. Development duties and workfile support still apply in full.
Real-World Application
A corporate client wants a brief valuation for internal planning only. The appraiser issues a Restricted Appraisal Report with a prominent warning that not all supporting rationale appears in the report, while keeping full support in the workfile.
More USPAP Questions
In a cost approach for an improved property, an appraiser estimates site value by sales comparison, allocation and extraction, then settles on one site-value figure before final reconciliation. How is this step best described?
An extraordinary assumption was reasonably supported, properly used and disclosed in an appraisal report. Later, the assumed information is found to be false. Which conclusion is best supported?
An otherwise applicable valuation approach cannot be developed reliably from the available data. The remaining scope can produce credible assignment results. What should the appraiser do?
May an appraiser use a hypothetical condition in any assignment?
An appraisal has a current effective date and permits an extraordinary assumption if its requirements are met. Which situation involves uncertain information rather than a fact known to be contrary to reality on that date?
Why must a report identify any real property interest that is being excluded from the value opinion?
Which review best helps explain divergent cost, sales-comparison and income indications?
Two value indications are $340,000 and $392,000. What is the difference as a percentage of the lower indication, rounded to one decimal place?
An unauthorized third party requests a lender-client’s report. No due-process or other permitted disclosure exception applies. How should the appraiser respond?
An appraiser proposes to assume there are no hidden defects. Which fact would characterize that assumption as extraordinary under the USPAP 2024 definition, rather than justify dismissing it as routine boilerplate?
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