Before accepting, an appraiser learns that she will personally receive part of the proceeds if her cousin’s subject property sells. What is required under USPAP?
Correct Answer
D) Disclose it before accepting and in the certification; stay impartial
A known current or prospective interest in the subject or assignment parties requires the relevant disclosure to the client and in certification. Disclosure does not permit bias. Here a stated personal financial benefit makes the interest explicit; family relationship alone should not be treated as conclusive proof of every financial interest or automatic disqualification.
Why This Is the Correct Answer
Option D is correct because USPAP requires an appraiser to disclose to the client, and in each subsequent report certification, any current or prospective interest in the subject property or parties involved. The appraiser also must not perform an assignment with bias, so after disclosure she must remain impartial.
Why the Other Options Are Wrong
Option A: Nothing, because a family member owns the subject property
Option A says nothing is required because a family member owns the property. The family relationship does not remove the duty; here the appraiser has a personal financial interest in the sale proceeds, which must be disclosed.
Option B: Disclose the interest only if the cousin later objects to the appraisal itself
Option B delays disclosure until the cousin later objects to the appraisal. The duty to disclose the interest is owed to the client and in the certification and does not depend on anyone objecting.
Option C: Disclose it, then treat disclosure as license to favor the cousin
Option C treats disclosure as license to favor the cousin. Disclosure does not permit bias, and USPAP states an appraiser must not perform an assignment with bias.
Disclose, then stay neutral
Disclosure is the first step and impartiality is the permanent duty; disclosing an interest does not excuse bias.
How to use: Use this two-part check whenever a question involves an appraiser's personal interest in a property.
Exam Tip
Choose answers that pair timely disclosure of an interest with continued impartiality.
Common Mistakes to Avoid
- -Believing disclosure permits favoring a related party
- -Waiting until someone complains before disclosing an interest
- -Assuming any family connection automatically disqualifies the appraiser
Concept Deep Dive
Analysis
This question tests the Ethics Rule's disclosure duty for a current or prospective interest in the subject property. The appraiser will personally receive part of the sale proceeds, which is an explicit financial interest. The rule requires disclosure to the client and in the certification, and disclosure does not license bias.
Background Knowledge
The Ethics Rule requires disclosure of interests in the subject property or parties, and of prior services regarding the subject property within the three-year period preceding the agreement to perform the assignment. A family relationship alone does not prove a financial interest or automatically disqualify an appraiser, but an explicit financial stake must be disclosed.
Real-World Application
An appraiser learns that she is a named beneficiary of part of the proceeds when her cousin's house sells. Before accepting the assignment she tells the client about the interest, notes it in her certification, and develops the opinion without favoring a higher value.
More USPAP Questions
Under USPAP, what are assignment results?
The certification required by Standards Rule 2-3 must be signed by:
Under 2024 USPAP, which statement correctly combines the requirements for an oral real property appraisal report and its workfile?
An appraiser accepts an assignment involving a property type the appraiser has valued once before, years ago. Competency requires:
A Certified General appraiser is asked to value a specialized industrial property for the first time. The appraiser knows a competency gap exists before agreeing to the assignment. What is required if the appraiser proceeds?
Under 2024 USPAP Standard 1, which listed assignment element must be identified in developing a real property appraisal?
An appraiser provided an appraisal of the same property for another client 18 months ago. No confidentiality obligation prevents disclosing the fact of that service. Before agreeing to a new assignment, the appraiser must:
According to USPAP, what is the primary purpose of the Ethics Rule?
An appraiser is asked to determine 'fair market value' for an assignment. According to USPAP, the appraiser should:
Which list gives the sections of the 2024 USPAP Ethics Rule?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam