An appraiser is developing a narrative report for a complex commercial property. The client requests that certain approaches to value be excluded. How should the appraiser handle this request?
Correct Answer
B) Determine scope of work based on what is necessary and appropriate
Why this is correct: USPAP's SCOPE OF WORK RULE requires the appraiser to determine the scope necessary for credible results. The appraiser must not allow a client's request to inappropriately limit the scope if doing so would compromise credibility. The decision must be based on what is necessary and appropriate, and disclosed in the report. Why the other choices are wrong: "Include all approaches regardless of client preference" is incorrect; the appraiser may properly limit the scope if some approaches are not necessary. "Comply with the client's request to maintain the relationship" is incorrect; compliance must not override professional standards. "Use only the approach that supports the client's expectations" is incorrect; this would violate independence and objectivity. Exam tip: Scope of work is the appraiser's professional decision, not the client's.
Why This Is the Correct Answer
CORRECT_ANSWER - Option C correctly reflects USPAP's Scope of Work Rule, which mandates that appraisers determine the appropriate scope of work based on what is necessary and appropriate to develop credible assignment results. The appraiser must exercise independent professional judgment in determining which approaches to value are needed, regardless of client preferences. This decision must be disclosed in the report along with the reasoning behind the scope of work choices. The appraiser's primary obligation is to produce credible results, not to satisfy client preferences that might compromise the assignment's reliability.
Why the Other Options Are Wrong
SCOPE Independence Rule
Remember 'SCOPE' - Scope determined by Credibility needs, Objectivity maintained, Professional judgment rules, Explained in report. The appraiser's SCOPE decisions must be independent of client preferences.
How to use: When you see questions about client requests to modify scope of work, immediately think 'SCOPE' and remember that credibility needs and professional judgment trump client preferences every time.
Exam Tip
Any time a question involves client pressure or requests that could affect the appraisal scope or conclusions, the answer will always favor professional independence and USPAP compliance over client accommodation.
Common Mistakes to Avoid
- -Prioritizing client relationships over USPAP compliance
- -Assuming all three approaches are always required
- -Failing to properly disclose and support scope of work decisions
Concept Deep Dive
Analysis
This question tests understanding of USPAP's Scope of Work Rule, which requires appraisers to determine and perform the scope of work necessary to develop credible assignment results. The appraiser must maintain independence and objectivity, making professional judgments about what approaches and methods are appropriate for the specific assignment. Client preferences or desires cannot override the appraiser's professional responsibility to develop credible results. The scope of work decision must be based on the complexity of the assignment, the intended use, and what is necessary to produce reliable conclusions.
Background Knowledge
USPAP's Scope of Work Rule requires appraisers to determine and perform the scope of work necessary to develop credible assignment results, based on professional judgment rather than client preferences. The appraiser must maintain independence and objectivity throughout the assignment, disclosing and supporting all scope of work decisions in the report.
Real-World Application
In practice, clients may request excluding certain approaches to save costs or time, but appraisers must resist if those approaches are necessary for credible results. For example, if a client wants to exclude the cost approach for a special-purpose property where it's essential, the appraiser must include it and explain why it's necessary in the scope of work disclosure.
More USPAP Questions
An appraiser is analyzing three comparable sales with the following data: Sale 1: $350,000 with +$10,000 adjustments; Sale 2: $340,000 with -$5,000 adjustments; Sale 3: $360,000 with -$15,000 adjustments. What are the adjusted sale prices?
A lender orders an appraisal for a $300,000 residential loan. After receiving the appraisal, the loan officer contacts the appraiser requesting that certain language be changed to better support the loan approval. This scenario represents a violation of:
How often must appraisers complete continuing education to maintain their license or certification?
Under FIRREA, which federal agency was given the authority to set minimum standards for real estate appraisers performing appraisals in federally related transactions?
How often must licensed and certified appraisers complete continuing education to maintain their credentials according to AQB requirements?
FIRREA was enacted primarily in response to which financial crisis?
In a narrative appraisal report, which section would typically contain the appraiser's analysis of highest and best use?
A narrative appraisal report for a commercial property must include detailed analysis of income, expenses, and capitalization rates. This level of detail is primarily required because:
Under the Dodd-Frank Act, which entity is responsible for establishing appraisal standards for federally related transactions?
In the URAR form, what does the appraiser indicate in the 'Subject' column for site size?
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