In the URAR form, if an appraiser makes a $5,000 adjustment for a bathroom difference between the subject and a comparable sale, what must be included in the report?
Correct Answer
B) The adjustment amount and a brief explanation
The URAR form requires both the adjustment amount and a brief explanation of the reason for the adjustment. While detailed support should be maintained in the appraiser's workfile, the form itself requires the amount and explanation.
Why This Is the Correct Answer
Option B is correct because URAR form requirements specifically mandate that adjustments include both the dollar amount and a brief explanation of the reason for the adjustment. This dual requirement ensures that anyone reviewing the appraisal can understand what feature difference prompted the adjustment and how much value difference it represents. The form is designed to be clear and informative without being overly detailed, so both elements are necessary but sufficient. This approach provides transparency while maintaining the report's readability and professional format.
Why the Other Options Are Wrong
Option A: Only the dollar amount of the adjustment
Option A is insufficient because providing only the dollar amount without explanation would leave readers unable to understand what feature difference justified the adjustment, violating URAR transparency requirements.
Option C: Detailed market data supporting the adjustment amount
Option C goes beyond URAR form requirements, as detailed market data supporting adjustments should be maintained in the appraiser's workfile but is not required to be included in the actual URAR form itself.
Option D: Comparable sales that specifically sold due to bathroom differences
Option D is impractical and unnecessary, as finding comparable sales that sold specifically due to bathroom differences would be nearly impossible and is not required by URAR standards.
The 'Amount + Reason' Rule
Remember 'A+R' - Amount plus Reason. Every URAR adjustment needs both the dollar Amount and the Reason explained. Think of it like a math problem where you must 'show your work' but keep it brief.
How to use: When you see any question about URAR adjustments, immediately think 'A+R' and look for the answer choice that includes both the adjustment amount and an explanation, but not excessive detail.
Exam Tip
On exam day, remember that URAR questions often test the balance between too little information (just numbers) and too much information (excessive detail) - look for the middle ground that provides both amount and brief explanation.
Common Mistakes to Avoid
- -Thinking only the dollar amount is sufficient for URAR requirements
- -Believing that detailed market data must be included in the form rather than the workfile
- -Assuming that specific comparable sales proving the adjustment are required in the report
Concept Deep Dive
Analysis
The URAR (Uniform Residential Appraisal Report) form has specific requirements for documenting adjustments made during the sales comparison approach. When appraisers make adjustments to comparable sales to account for differences with the subject property, they must provide both the numerical adjustment amount and a clear explanation of what the adjustment represents. This dual requirement ensures transparency and allows readers to understand the appraiser's reasoning without requiring excessive detail that would clutter the form. The form strikes a balance between providing adequate information for understanding while keeping the report concise and readable.
Background Knowledge
The URAR form is the standard residential appraisal report format that requires specific documentation standards for the sales comparison approach. Appraisers must follow Fannie Mae and Freddie Mac guidelines for completing this form, which specify what information must be included versus what should be kept in supporting workfiles.
Real-World Application
In practice, an appraiser might write '$5,000 for additional bathroom' in the adjustment grid, providing the amount and clear reason without needing to include detailed market studies or extensive comparable sales analysis in the form itself.
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?
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
USPAP (Ethics & Standards)
15% of exam
Related Tools
Previous Question
An appraiser discovers after completing a URAR that one of the comparable sales was actually a foreclosure sale, which significantly affects the analysis. According to USPAP, what action should the appraiser take?
Next Question
Under FIRREA, which federal agency is responsible for prescribing appraisal standards for federally related transactions?