How should intended use affect an appraisal?
Correct Answer
D) Guide necessary scope and reporting while preserving unbiased results
Identify intended use under SR 1-2(b) and do not let that use or the client’s objectives bias results. Intended use guides scope and reporting; it does not authorize selecting a predetermined loan amount or omitting identification for oral delivery.
Why This Is the Correct Answer
Option D is correct because intended use, identified under SR 1-2(b), guides the scope of work and reporting needed for credible results. USPAP also states that an appraiser must not allow the intended use or a client's objectives to cause biased results, so the guidance must preserve impartiality.
Why the Other Options Are Wrong
Option A: Determine the value needed to maximize the loan
Option A is wrong because using intended use to determine the value needed to maximize the loan lets a client objective drive the result. USPAP prohibits allowing the intended use or client objectives to bias assignment results.
Option B: Be omitted from the analysis for each oral report
Option B is wrong because intended use is not omitted from the analysis for oral reports. Identifying intended use is part of problem identification regardless of how results are delivered.
Option C: Be selected after the desired value is reached, to match the report to that value
Option C is wrong because selecting the intended use after reaching a desired value, to match the report to that value, reverses the process and signals bias. Intended use is identified at the start to shape the scope, not chosen afterward to fit a number.
Use shapes scope, not value
Intended use tells you how much work and what kind of report; it never tells you what number to reach.
How to use: Use this to reject answers that link intended use to a desired value.
Exam Tip
Any option tying intended use to a loan amount or desired value is a bias distractor.
Common Mistakes to Avoid
- -Letting a target loan amount influence the value
- -Thinking oral reports do not require identifying intended use
- -Confusing intended use with intended users
Concept Deep Dive
Analysis
This question tests the role of intended use in an assignment. Intended use helps determine the scope of work and reporting, but USPAP forbids letting it or the client's objectives bias results. Eliminate any option that ties intended use to a target value.
Background Knowledge
Intended use is how the client plans to use the assignment results, such as a mortgage decision or estate settlement. It is one of the key factors in determining the scope of work. Assignment conditions also must not limit scope so much that results are not credible for the intended use.
Real-World Application
An appraiser takes an assignment for a home equity loan decision. The intended use leads the appraiser to choose a scope that includes an interior inspection and a sales comparison analysis suitable for lending. When the loan officer mentions a needed value, the appraiser keeps the analysis independent of that figure.
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