An Appraisal Report entirely omits the required type and definition of value and its source. What is the issue?
Correct Answer
A) Required value-definition information is missing
The Appraisal Report must communicate the type and definition of value and cite its source as required. A value label is not always self-explanatory, and omission does not automatically convert the report into a different reporting option or change its effective date.
Why This Is the Correct Answer
Option A is correct because an Appraisal Report must state the type and definition of value and cite the source of the definition. Omitting all of this leaves required value-definition information missing, which keeps intended users from knowing exactly what value was developed.
Why the Other Options Are Wrong
Option B: Market value is implied, so no definition is needed
Option B is wrong because implying market value does not remove the need to state the definition. Market value has more than one definition, so the report must state the definition used and cite its source.
Option C: The report becomes a Restricted Appraisal Report by default
Option C is wrong because omitting required content does not turn the report into a Restricted Appraisal Report by default. The reporting option is chosen deliberately, and a deficient Appraisal Report is still a deficient Appraisal Report.
Option D: The report date replaces the missing effective date
Option D is wrong because the stem concerns a missing value definition, not a missing effective date, and the report date does not replace the effective date. The two dates serve different purposes and both are reported.
Name it, define it, cite it
For the value opinion, the report must name the type of value, give its definition and cite where the definition comes from.
How to use: Use this to check whether a report's value-definition section is complete.
Exam Tip
Be wary of answers claiming an omission changes the report type or that one date can stand in for another.
Common Mistakes to Avoid
- -Assuming market value needs no stated definition
- -Believing a deficient report becomes a different report option
- -Confusing the report date with the effective date
Concept Deep Dive
Analysis
This question tests a required element of an Appraisal Report. SR 2-2 requires the report to state the type and definition of value and cite the source of the definition. If that is omitted, the report is missing required content; the omission does not change the report type or the dates.
Background Knowledge
The type of value, such as market value, investment value or liquidation value, and its exact definition shape the whole analysis. Different sources define market value with different conditions, which is why USPAP requires citing the source. Reports also separately state the effective date and the date of the report.
Real-World Application
A reviewer reads an Appraisal Report that gives a value figure but never says what type of value it is or which definition applies. The reviewer notes that users cannot tell whether the figure is market value under a lender's definition or something else. The appraiser revises the report to state the value type, its definition and the source.
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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