An appraiser who becomes aware that a client intends to use a report for a purpose other than the stated intended use should:
Correct Answer
B) Recognize the report was not developed for that use
Why this is correct: USPAP's Ethics Rule requires that an appraisal be developed for a specific intended use. If the client uses it for another purpose, the appraiser should recognize that the report was not designed for that use and may not be appropriate. Why the other choices are wrong: "Amend the report to cover the new purpose" is wrong because the appraiser cannot simply amend it; a new assignment may be needed. "Take no action, since use is the client's concern" is wrong because the appraiser has a professional responsibility regarding the report's proper use. "Void the original report immediately" is wrong because voiding is not the required first step; recognition and communication are. Exam tip: Intended use drives scope. A report for one use may not support another. Communicate, don't ignore.
Why This Is the Correct Answer
Why this is correct: USPAP's Ethics Rule requires that an appraisal be developed for a specific intended use. If the client uses it for another purpose, the appraiser should recognize that the report was not designed for that use and may not be appropriate. Why the other choices are wrong: "Amend the report to cover the new purpose" is wrong because the appraiser cannot simply amend it; a new assignment may be needed. "Take no action, since use is the client's concern" is wrong because the appraiser has a professional responsibility regarding the report's proper use. "Void the original report immediately" is wrong because voiding is not the required first step; recognition and communication are. Exam tip: Intended use drives scope. A report for one use may not support another. Communicate, don't ignore.
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:
People Also Study
Valuation Principles & Procedures
25% of exam
Property Description & Analysis
20% of exam
Market Analysis & Highest/Best Use
15% of exam
Appraisal Math & Statistics
15% of exam
Report Writing & Compliance
10% of exam
Related Tools
Previous Question
An appraiser is asked to remove an unfavorable comparable sale from a completed report before delivery. Complying would:
Next Question
A subject property has 2,400 square feet and sold comparable properties range from 2,200 to 2,800 square feet. If the market indicates a $50 per square foot adjustment for size differences, what adjustment should be made to a 2,200 square foot comparable?