An appraiser from another metro takes a lakefront assignment in a market she has never worked. Geographic competency requires her to:
Correct Answer
D) Acquire local market understanding before relying on her analysis
Why this is correct: The Competency Rule requires an appraiser to have the necessary knowledge and experience for a specific assignment. If lacking geographic competency, the appraiser must take steps to acquire sufficient understanding of the local market before accepting or completing the assignment, as stated in the original explanation. Why the other choices are wrong: "Decline unless she has lived in the market for a year" is incorrect; residency is not a USPAP requirement. "Rely on the client's own internal market summary for the local factors" is wrong; the appraiser must independently verify and understand market data. "Proceed normally, since a license is valid statewide" is false; a license does not automatically confer geographic competency. Exam tip: Competency can be achieved through research, association, or disclosure, not just prior experience.
Why This Is the Correct Answer
Why this is correct: The Competency Rule requires an appraiser to have the necessary knowledge and experience for a specific assignment. If lacking geographic competency, the appraiser must take steps to acquire sufficient understanding of the local market before accepting or completing the assignment, as stated in the original explanation. Why the other choices are wrong: "Decline unless she has lived in the market for a year" is incorrect; residency is not a USPAP requirement. "Rely on the client's own internal market summary for the local factors" is wrong; the appraiser must independently verify and understand market data. "Proceed normally, since a license is valid statewide" is false; a license does not automatically confer geographic competency. Exam tip: Competency can be achieved through research, association, or disclosure, not just prior experience.
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:
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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:
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