Lender guidelines that flag net adjustments over 15% or gross over 25% are:
Correct Answer
C) Client guidelines — exceeding them requires explanation, not refusal
Why this is correct: Common lender thresholds (e.g., net 15%, gross 25%) are client underwriting guidelines, not part of appraisal standards. Exceeding them does not automatically invalidate a comparable but requires a clear explanation in the report. Why the other choices are wrong: 'Requirements written into the appraisal standards themselves' is wrong; USPAP does not set specific numerical limits. 'Statutory limits enforced by the state appraisal boards' is wrong; these are not state law. 'Absolute ceilings above which a comparable may never be used' is wrong; a well-supported comparable exceeding the guidelines can be used. Exam tip: Always explain why a comparable with large adjustments is the best available evidence.
Why This Is the Correct Answer
Why this is correct: Common lender thresholds (e.g., net 15%, gross 25%) are client underwriting guidelines, not part of appraisal standards. Exceeding them does not automatically invalidate a comparable but requires a clear explanation in the report. Why the other choices are wrong: 'Requirements written into the appraisal standards themselves' is wrong; USPAP does not set specific numerical limits. 'Statutory limits enforced by the state appraisal boards' is wrong; these are not state law. 'Absolute ceilings above which a comparable may never be used' is wrong; a well-supported comparable exceeding the guidelines can be used. Exam tip: Always explain why a comparable with large adjustments is the best available evidence.
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