In an appraisal assignment, 'intended use' refers to:
Correct Answer
D) How the client will use the appraisal results
Intended use means the use or uses of the appraiser’s reported opinions and conclusions, as identified by the appraiser based on communication with the client. It concerns how results will be used, while intended users are who may use them.
Why This Is the Correct Answer
Option D is correct because USPAP defines intended use as the use or uses of the appraiser's reported opinions and conclusions, as identified by the appraiser based on communication with the client. Describing how the client will use the appraisal results, such as for a mortgage lending decision, captures exactly that purpose. Standards Rule 1-2(b) requires the appraiser to identify this intended use.
Why the Other Options Are Wrong
Option A: Who will be making use of the appraisal report
Option A, who will be making use of the appraisal report, describes the intended users, not the intended use. Standards Rule 1-2(a) treats the client and other intended users as a separate assignment element from intended use.
Option B: Which approaches to value are going to be used
Option B, which approaches to value are going to be used, is a scope of work decision the appraiser makes after identifying the problem. The approaches chosen depend partly on intended use, but they are not what intended use means.
Option C: The type of property that is being appraised
Option C, the type of property being appraised, relates to identifying the subject property and its characteristics. It says nothing about how the appraisal results will be used, so it is not intended use.
Use is how, users are who
Intended USE tells HOW the results will be used; intended USERS tells WHO will rely on them. The extra letters in users point to people.
How to use: Use this when an option describes a person or party and you must decide whether it is intended use or intended users.
Exam Tip
When a question asks about intended use, look for an answer describing a purpose or decision the appraisal supports. Answers naming a party usually describe intended users instead.
Common Mistakes to Avoid
- -Confusing intended use with intended users
- -Treating the choice of valuation approaches as the intended use
- -Assuming the type of property defines the intended use
Concept Deep Dive
Analysis
This question tests the difference between two closely related assignment elements in USPAP problem identification: intended use and intended users. Intended use answers how the appraiser's opinions and conclusions will be used, while intended users answers who will use them. Read each option and ask whether it describes a purpose or a person; only the purpose fits intended use.
Background Knowledge
USPAP requires the appraiser to identify the problem to be solved, which includes the client and other intended users, the intended use, the type and definition of value, the effective date, the relevant property characteristics and assignment conditions. Intended use is identified by the appraiser through communication with the client, and it drives the scope of work needed for credible results.
Real-World Application
A lender orders an appraisal of a single-family home to decide whether to approve a purchase loan. The appraiser records the intended use as evaluating the property for a mortgage lending decision and separately lists the lender as the client and intended user. That intended use shapes the level of research and analysis the appraiser performs.
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