An appraiser physically observes a property to identify relevant characteristics. Does that observation alone constitute a complete market-value appraisal?
Correct Answer
A) No; an inspection supplies observations, while an appraisal needs analysis
A personal inspection is a physical observation assisting identification of relevant property characteristics in a valuation service. Observation alone is not a complete market-value appraisal. A credible appraisal requires the appropriate problem identification, research and analyses; the necessary inspection scope depends on the assignment and applicable requirements. Report personal inspection and other observations accurately.
Why This Is the Correct Answer
Option A is correct because a personal inspection supplies observations of property characteristics, while an appraisal requires developing an opinion of value through analysis. USPAP defines personal inspection as in-person observation performed as part of the scope of work. Observation alone is not a complete market value appraisal.
Why the Other Options Are Wrong
Option B: Yes; viewing a property is enough to establish its market value
Option B says viewing a property is enough to establish its market value. Viewing provides observations, but market value requires problem identification, research and analysis.
Option C: Yes; once it has been viewed, no value definition or effective date is needed
Option C says once a property has been viewed, no value definition or effective date is needed. An appraisal requires identifying the type and definition of value and the effective date regardless of any inspection.
Option D: No; because USPAP bars an appraiser from inspecting in person
Option D says no because USPAP bars an appraiser from inspecting in person. USPAP does not bar personal inspections; it defines them as part of the scope of work.
Looking Is Not Valuing
An inspection gathers facts, and an appraisal analyzes them to reach a value.
How to use: Use this to separate inspection from appraisal on definition questions.
Exam Tip
Watch for options that skip value definition, effective date or analysis. An inspection is one input, not the full appraisal.
Common Mistakes to Avoid
- -Treating an inspection as a complete appraisal
- -Forgetting the value definition and effective date
- -Believing USPAP prohibits personal inspections
Concept Deep Dive
Analysis
This question tests the difference between a personal inspection and an appraisal. A personal inspection is in-person observation performed as part of the scope of work, while an appraisal is the act or process of developing an opinion of value. Observation supplies information but does not by itself produce a value opinion.
Background Knowledge
USPAP defines an appraisal as the act or process of developing an opinion of value, or the opinion itself. A personal inspection is the appraiser's in-person observation of the subject as part of the scope of work. The needed inspection level depends on the assignment, and analysis turns observations into a value opinion.
Real-World Application
A homeowner asks an appraiser to walk through the house and give a value on the spot. The appraiser explains that the walkthrough provides observations, but a credible value opinion also needs a defined value type, an effective date and analysis of market data. She offers to complete a full assignment instead.
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