An appraiser receives a request to modify a completed appraisal report to increase the value conclusion by $15,000 to meet the contract price. The appraiser should:
Correct Answer
B) Refuse to modify the report and document the request
USPAP Ethics Rule requires appraisers to refuse requests to change a value conclusion to meet a predetermined value. The appraiser must refuse the request and should document it for potential regulatory reporting, as this represents an attempt to compromise appraiser independence.
Why This Is the Correct Answer
Option B correctly follows USPAP Ethics Rule requirements for maintaining appraiser independence. When faced with requests to change value conclusions to meet predetermined amounts, appraisers must refuse such requests to preserve the integrity of their professional opinion. Documentation of the request is crucial for potential regulatory reporting and protects the appraiser by creating a record of the attempted compromise. This approach maintains compliance with professional standards while protecting both the appraiser's license and the public trust.
Why the Other Options Are Wrong
Option A: Modify the report if additional comparable sales support the higher value
This option is incorrect because it suggests the appraiser should modify the report based on the client's request rather than independent market analysis. Even if additional comparable sales exist, the decision to revise should be based on the appraiser's professional judgment, not client pressure to meet a contract price.
Option C: Modify the report but note the change was requested by the client
This option violates USPAP by allowing the value conclusion to be influenced by client pressure rather than market evidence. Simply noting that the change was requested doesn't cure the ethical violation of compromising professional independence and potentially misleading intended users about the true market value.
Option D: Withdraw from the assignment immediately
While withdrawal might seem appropriate, it's not required as the first response. USPAP allows appraisers to refuse inappropriate requests and continue working with clients who respect professional boundaries. Immediate withdrawal without first refusing and documenting the request may be unnecessarily extreme.
REFUSE and RECORD Rule
Remember 'REFUSE and RECORD' - when clients request value changes to meet predetermined amounts, always REFUSE the request and RECORD (document) the attempt for regulatory protection and professional compliance.
How to use: When you see any question about client pressure to change values, immediately think 'REFUSE and RECORD' to identify the correct response that maintains USPAP compliance and professional integrity.
Exam Tip
Questions about client pressure to modify values will always have the correct answer involving refusal and documentation - never choose options that suggest accommodating client requests to change value conclusions.
Common Mistakes to Avoid
- -Thinking additional comparable sales justify changing values to meet client requests
- -Believing that noting client requests in the report makes value modifications acceptable
- -Assuming immediate withdrawal is always required when facing inappropriate client requests
Concept Deep Dive
Analysis
This question tests understanding of USPAP Ethics Rule regarding appraiser independence and the prohibition against predetermined value conclusions. The scenario presents a clear violation attempt where a client requests modification of a completed appraisal to meet a specific value target. USPAP strictly prohibits appraisers from developing, reporting, or communicating appraisal services in a misleading or fraudulent manner, which includes changing conclusions to meet client expectations rather than market evidence. The appraiser's professional integrity and independence must be maintained regardless of client pressure or financial incentives.
Background Knowledge
USPAP Ethics Rule establishes fundamental principles requiring appraisers to perform assignments with impartiality, objectivity, and independence, free from accommodation of personal interests or client pressure. The Conduct section specifically prohibits developing, reporting, or communicating appraisal services in a misleading or fraudulent manner, which includes modifying conclusions to meet predetermined values.
Real-World Application
In practice, appraisers frequently face pressure from lenders, real estate agents, or borrowers to 'hit' contract prices, especially in competitive markets. Professional appraisers must resist this pressure, document such requests, and maintain independence to preserve public trust and avoid regulatory sanctions or license revocation.
More Report Writing Questions
Under FIRREA, which federal agency has the authority to set minimum standards for real estate appraisals in federally related transactions?
What is the minimum transaction threshold for requiring a state licensed or certified appraiser under Title XI for most federally related transactions?
The Dodd-Frank Act established which requirement specifically related to appraisal independence?
Which of the following is NOT a responsibility of the Appraisal Subcommittee (ASC)?
State appraiser regulatory agencies are primarily responsible for which of the following functions?
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