A vendor will not disclose how its model reaches an estimate. What does this mean for the appraiser?
Correct Answer
C) It is harder to judge whether reliance is reasonable
Why this is correct: USPAP requires an appraiser to understand and correctly employ recognized methods. A 'black box' model makes it difficult to assess the reasonableness of the method, though the appraiser can still test the reasonableness of the output. Why the other choices are wrong: "The output cannot be used in any circumstances" is too absolute; it can be used if properly validated. "The vendor assumes responsibility for the result" is false; the appraiser retains responsibility for the appraisal's content. "The model must be registered before it is relied upon" is not a USPAP or common regulatory requirement. Exam tip: You are responsible for your appraisal even when using third-party tools; understand or adequately test them.
Why This Is the Correct Answer
Why this is correct: USPAP requires an appraiser to understand and correctly employ recognized methods. A 'black box' model makes it difficult to assess the reasonableness of the method, though the appraiser can still test the reasonableness of the output. Why the other choices are wrong: "The output cannot be used in any circumstances" is too absolute; it can be used if properly validated. "The vendor assumes responsibility for the result" is false; the appraiser retains responsibility for the appraisal's content. "The model must be registered before it is relied upon" is not a USPAP or common regulatory requirement. Exam tip: You are responsible for your appraisal even when using third-party tools; understand or adequately test them.
More emerging-appraisal-methods Questions
An appraiser consults a geographic information system for parcel boundaries. What limitation applies?
How does an alternative inspection method affect the appraiser's disclosure obligations?
A collector's photographs show a condition the appraiser believes needs specialist assessment. What is the appropriate step?
What responsibility does an appraiser retain for an error originating in a third-party database?
Under current USPAP guidance, what is the output of an automated valuation model before an appraiser analyzes it?
A lender's guidelines require an interior inspection, but the client asks for a desktop product to save time. What should the appraiser do?
How should an appraiser respond to a client requesting a shorter turn time than credible results allow?
Which assignment type still requires the appraiser to develop an opinion of value?
An appraiser relies on a published capitalization rate survey. What must be considered?
A model returns an estimate far from the appraiser's own conclusion. What is the appropriate response?
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