An appraiser reviews another appraiser’s appraisal that relied partly on an AVM. Within the agreed review scope, what is the central analytical question?
Correct Answer
C) Whether the analyses and conclusions are appropriate and credible
An appraisal review develops an opinion about the quality of another appraiser’s work. Within the review scope, examine the appropriateness and credibility of the analysis, data, assumptions, and conclusions in the context of applicable requirements. Model reliance is evaluated on its actual support and applicability, rather than its brand or the reviewer’s personal preference. A reviewer’s own value opinion, if included, entails additional applicable requirements.
Why This Is the Correct Answer
Option C is correct because the reviewer's central question is whether the analyses and conclusions are appropriate and credible. USPAP directs the reviewer to develop an opinion on whether the analyses are appropriate and whether the opinions and conclusions are credible within the context of the requirements applicable to that work. The AVM reliance is judged by its actual support and applicability.
Why the Other Options Are Wrong
Option A: Whether the original appraiser chose the highest available model result
Option A asks whether the original appraiser chose the highest available model result. Picking the highest figure is not the review standard; the reviewer judges whether the analysis is appropriate and credible.
Option B: Whether the reviewer personally prefers the same valuation software
Option B asks whether the reviewer personally prefers the same valuation software. A reviewer's software preference is irrelevant to whether the work under review is appropriate and credible.
Option D: Whether the appraisal mentions an AVM, which by itself would invalidate it
Option D asks whether the appraisal mentions an AVM, treating that mention by itself as invalidating. Using an AVM does not by itself invalidate an appraisal; its use is evaluated on support and applicability.
Appropriate analysis, credible conclusions
A review asks two questions: were the analyses appropriate, and are the conclusions credible?
How to use: Use these two questions to identify the correct answer on any appraisal review item.
Exam Tip
Review questions reward focus on appropriateness and credibility, not on the reviewer's preferences or whether a particular tool appears.
Common Mistakes to Avoid
- -Treating any AVM use as automatically invalidating an appraisal
- -Judging the work by the reviewer's own software preferences
- -Developing a reviewer value opinion without meeting its additional requirements
Concept Deep Dive
Analysis
This question tests the central question in an appraisal review. Under Standard 3, the reviewer develops opinions about whether the analyses are appropriate and whether the opinions and conclusions are credible within the context of applicable requirements. Reliance on an AVM is judged on its support and applicability, not on preferences or its mere presence.
Background Knowledge
Appraisal review develops an opinion about the quality of another appraiser's work within an agreed scope. The reviewer evaluates data, assumptions, analyses and conclusions. If the reviewer also develops an independent opinion of value, additional requirements apply to that part of the work.
Real-World Application
A reviewer examines an appraisal that used an AVM as supporting evidence. The reviewer checks whether the appraiser understood the model's limits and corroborated its figure with verified sales, then concludes whether the analysis was appropriate and credible.
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