An appraiser previously valued a property for Lender A. Lender B now requests an appraisal of the same property. The appraiser must:
Correct Answer
D) Disclose to Lender B that prior services were performed, without revealing the results
Why this is correct: USPAP's Confidentiality section and the Ethics Rule create two duties: disclose prior services to a new client, but keep the prior assignment's results confidential. The appraiser must inform Lender B of the prior work without revealing the value opinion or report details. Why the other choices are wrong: 'Decline the new assignment because of the earlier engagement entirely' is wrong; prior work does not automatically preclude a new assignment. 'Provide Lender B with a copy of the prior report for reference purposes' violates confidentiality owed to Lender A. 'Disclose the prior engagement to Lender A before speaking with Lender B at all' is incorrect; the appraiser has no duty to seek permission from the prior client. Exam tip: Remember the rule: disclose the fact of prior service, not the content.
Why This Is the Correct Answer
Why this is correct: USPAP's Confidentiality section and the Ethics Rule create two duties: disclose prior services to a new client, but keep the prior assignment's results confidential. The appraiser must inform Lender B of the prior work without revealing the value opinion or report details. Why the other choices are wrong: 'Decline the new assignment because of the earlier engagement entirely' is wrong; prior work does not automatically preclude a new assignment. 'Provide Lender B with a copy of the prior report for reference purposes' violates confidentiality owed to Lender A. 'Disclose the prior engagement to Lender A before speaking with Lender B at all' is incorrect; the appraiser has no duty to seek permission from the prior client. Exam tip: Remember the rule: disclose the fact of prior service, not the content.
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:
According to the Scope of Work Rule, the scope of work must be appropriate to the:
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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