Which statement correctly relates appraisal practice and valuation services under USPAP?
Correct Answer
D) Appraisers do appraisal practice; others may also do valuation services
Valuation service concerns an aspect of property value regardless of service type or provider. Appraisal practice is valuation service performed by someone acting as an appraiser and includes more than just appraisals and appraisal reviews. Determine the person’s actual expected role and applicable legal requirements; a job label alone does not resolve whether the service is appraisal practice.
Why This Is the Correct Answer
Option D is correct because USPAP defines appraisal practice as valuation services performed by an individual acting as an appraiser, and valuation service as a service pertaining to property value regardless of whether appraisers or others perform it. So appraisal practice is done by appraisers, while valuation services may also be done by others.
Why the Other Options Are Wrong
Option A: They are identical, so valuation services are provided by appraisers alone
Option A, that the terms are identical and only appraisers provide valuation services, is wrong because valuation services can be performed by appraisers or by others, so the terms are not identical.
Option B: Valuation services mean Standard 1 appraisals and no other work
Option B, that valuation services mean Standard 1 appraisals and no other work, is wrong because valuation service covers any service pertaining to an aspect of property value, not only real property appraisals.
Option C: Appraisal practice means auctions conducted by licensed appraisers
Option C, that appraisal practice means auctions conducted by licensed appraisers, is wrong because appraisal practice means valuation services by someone acting as an appraiser, including but not limited to appraisal and appraisal review; it is not defined by auctions.
Big circle, small circle
Valuation services are the big circle anyone can be in; appraisal practice is the smaller circle inside it for people acting as appraisers.
How to use: Use this picture to sort definitional questions about who performs which services.
Exam Tip
Appraisal practice includes more than appraisals and reviews, and whether someone is acting as an appraiser depends on their role and expectations, not a job title.
Common Mistakes to Avoid
- -Treating valuation services and appraisal practice as the same thing
- -Thinking appraisal practice covers only appraisals and reviews
- -Deciding the role from a job title instead of expectations and law
Concept Deep Dive
Analysis
This question tests the USPAP definitions of valuation service and appraisal practice. Valuation service is any service pertaining to an aspect of property value, whether performed by appraisers or by others. Appraisal practice is the subset of valuation services performed by an individual acting as an appraiser.
Background Knowledge
USPAP applies when an individual is acting as an appraiser, which depends on the expectations of the client and others and on applicable law. Valuation services such as broker price opinions or consulting can be performed by non-appraisers, but when an appraiser performs them in that role, they are appraisal practice.
Real-World Application
A real estate broker gives a seller a price opinion, which is a valuation service but not appraisal practice. When a licensed appraiser gives a similar opinion to a client who expects her to act as an appraiser, it is appraisal practice and USPAP applies.
More USPAP Questions
Under USPAP, what are assignment results?
The certification required by Standards Rule 2-3 must be signed by:
Under 2024 USPAP, which statement correctly combines the requirements for an oral real property appraisal report and its workfile?
An appraiser accepts an assignment involving a property type the appraiser has valued once before, years ago. Competency requires:
A Certified General appraiser is asked to value a specialized industrial property for the first time. The appraiser knows a competency gap exists before agreeing to the assignment. What is required if the appraiser proceeds?
Under 2024 USPAP Standard 1, which listed assignment element must be identified in developing a real property appraisal?
An appraiser provided an appraisal of the same property for another client 18 months ago. No confidentiality obligation prevents disclosing the fact of that service. Before agreeing to a new assignment, the appraiser must:
According to USPAP, what is the primary purpose of the Ethics Rule?
An appraiser is asked to determine 'fair market value' for an assignment. According to USPAP, the appraiser should:
Which list gives the sections of the 2024 USPAP Ethics Rule?
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