What is the appraiser's obligation when a site's legal description does not match its apparent physical boundaries?
Correct Answer
C) Investigate and establish the property appraised, documenting the basis and limitations
Investigate the discrepancy using reliable title, survey or other appropriate information, and identify the property actually appraised and any material limitations. Disclosure alone does not resolve an uncertain property identity. Do not choose a convenient boundary or assume an unsupported legal conclusion.
Why This Is the Correct Answer
Option C is correct because USPAP requires the report to contain information sufficient to identify the real estate, including its physical and legal characteristics. The appraiser should investigate the discrepancy using title, survey or other appropriate information, establish the property actually appraised, and document the basis and any material limitations.
Why the Other Options Are Wrong
Option A: Use whichever boundary yields the highest value
Option A, using whichever boundary yields the highest value, is advocacy rather than objective property identification. The property appraised must be determined by evidence, not by its effect on value.
Option B: Ignore the legal description whenever a fence exists
Option B, ignoring the legal description whenever a fence exists, assumes a legal conclusion that a fence does not establish. A fence may or may not match the legal boundary, so the discrepancy must be investigated.
Option D: Reduce the value by the apparent area difference, without investigating the boundary
Option D, reducing value by the apparent area difference without investigating, skips the required identification step. The appraiser first needs to establish what property is being appraised before any value effect can be supported.
Identify before you value
You cannot value a property until you know exactly which property it is, so boundary conflicts get investigated first.
How to use: Use this when a question describes a mismatch between records and what is seen on site.
Exam Tip
Prefer answers that call for investigation, identification and disclosure over answers that pick a boundary or adjust value without support.
Common Mistakes to Avoid
- -Treating a fence line as the legal boundary
- -Selecting the boundary that produces the higher value
- -Disclosing the discrepancy without resolving which property is appraised
Concept Deep Dive
Analysis
This question tests the appraiser's duty to identify the real estate being appraised. When the legal description and physical boundaries disagree, the appraiser must investigate with reliable information and clearly state what property was appraised and any limitations. Choosing a convenient boundary or making an unsupported adjustment does not meet that duty.
Background Knowledge
Identifying the subject property, including its legal and physical characteristics and the interest appraised, is a basic part of scope of work. Boundary questions may require surveys, title records or extraordinary assumptions, and a material uncertainty must be disclosed.
Real-World Application
During an inspection, an appraiser notices that a fence encloses a strip the plat map shows as part of the neighboring lot. The appraiser reviews the survey and title information, identifies the property appraised as the legally described parcel, and notes the encroachment and its possible effect in the report.
More Land/Site Questions
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Which fact, if supported by competitive-market evidence, most directly supports a unit-price premium for an otherwise comparable site?
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