How do the content obligations of the two written report options differ with respect to the appraisal methods and techniques employed?
Correct Answer
C) An Appraisal Report summarizes them; a Restricted one states them
For the appraisal methods and techniques employed, SR 2-2(a)(x)(1) requires an Appraisal Report to summarize them, while SR 2-2(b)(xii)(1) requires a Restricted Appraisal Report to state them. These are reporting-content differences, not permission to perform less appraisal development. A statement still must communicate the required matter without misleading the named intended users.
Why This Is the Correct Answer
Option C is correct because SR 2-2(a)(x)(1) requires an Appraisal Report to summarize the appraisal methods and techniques employed, while SR 2-2(b)(xii)(1) requires a Restricted Appraisal Report to state them. Summarizing provides more detail than stating. These are reporting differences only and do not permit less development work.
Why the Other Options Are Wrong
Option A: An Appraisal Report states them; a Restricted one summarizes
Option A says an Appraisal Report states them and a Restricted one summarizes. This reverses the rules: the Appraisal Report summarizes, and the Restricted Appraisal Report states.
Option B: An Appraisal Report describes them; a Restricted one lists them
Option B says an Appraisal Report describes them and a Restricted one lists them. Neither describes nor lists is the term USPAP uses here; the requirements are summarize and state.
Option D: An Appraisal Report summarizes them; a Restricted one omits them
Option D says a Restricted Appraisal Report omits them. The Restricted Appraisal Report must still state the methods and techniques employed, so they cannot be omitted.
Restricted Report, Shorter Verb
The Restricted Appraisal Report gives less detail, so it uses the lighter verb, state. The Appraisal Report uses summarize.
How to use: Use this to assign summarize to the Appraisal Report and state to the Restricted Appraisal Report.
Exam Tip
Watch for options that swap the verbs or say the restricted report omits a required item. Reporting differences do not change development requirements.
Common Mistakes to Avoid
- -Reversing summarize and state between the two report types
- -Believing a Restricted Appraisal Report may omit the methods used
- -Thinking a restricted report allows less development work
Concept Deep Dive
Analysis
This question tests the precise reporting verbs used for the two written report options under Standard 2. For appraisal methods and techniques employed, an Appraisal Report summarizes them while a Restricted Appraisal Report states them. You need to match each report type to the right level of reporting detail.
Background Knowledge
USPAP offers two written report options for real property: the Appraisal Report and the Restricted Appraisal Report. The Appraisal Report generally summarizes information, while the Restricted Appraisal Report generally states it, giving less detail. Both require the same level of development and must not mislead intended users.
Real-World Application
A client who is the only intended user requests a Restricted Appraisal Report for internal portfolio planning. The appraiser states that the sales comparison and income approaches were used, while the workfile holds the full analysis. If the client later needs the report for a lender, a new Appraisal Report would summarize those methods.
More USPAP Questions
In a cost approach for an improved property, an appraiser estimates site value by sales comparison, allocation and extraction, then settles on one site-value figure before final reconciliation. How is this step best described?
An extraordinary assumption was reasonably supported, properly used and disclosed in an appraisal report. Later, the assumed information is found to be false. Which conclusion is best supported?
An otherwise applicable valuation approach cannot be developed reliably from the available data. The remaining scope can produce credible assignment results. What should the appraiser do?
May an appraiser use a hypothetical condition in any assignment?
An appraisal has a current effective date and permits an extraordinary assumption if its requirements are met. Which situation involves uncertain information rather than a fact known to be contrary to reality on that date?
Why must a report identify any real property interest that is being excluded from the value opinion?
Which review best helps explain divergent cost, sales-comparison and income indications?
Two value indications are $340,000 and $392,000. What is the difference as a percentage of the lower indication, rounded to one decimal place?
An unauthorized third party requests a lender-client’s report. No due-process or other permitted disclosure exception applies. How should the appraiser respond?
An appraiser proposes to assume there are no hidden defects. Which fact would characterize that assumption as extraordinary under the USPAP 2024 definition, rather than justify dismissing it as routine boilerplate?
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Previous Question
An appraiser first weighted sales comparison ($530,000) at 60%, cost ($565,000) at 25% and income ($480,000) at 15%. Further analysis shows the rent data are unreliable, so the income indication is dropped and the remaining weights are rescaled in their existing 60:25 proportion. What is the reconciled value, rounded to the nearest dollar?
Next Question
When two approaches produce nearly identical indications and a third diverges sharply, the reconciliation should: