What is the relationship between the report and the workfile?
Correct Answer
D) The workfile holds support; the report still meets its own content rules
The workfile holds required report copies, summaries and certifications where applicable, and supporting data, information, documentation, or appropriate references with required retention, access, and retrieval. It does not universally have to be delivered with the report. Restricted Appraisal Reports may require additional workfile information to be properly understood, but that does not excuse omitting content required by that report option.
Why This Is the Correct Answer
Option D is correct because the workfile contains the data, information and documentation necessary to support the appraiser's opinions and conclusions and to show USPAP compliance, or references to where they are located. The report must still satisfy the content rules of the chosen report option. Workfile support does not excuse missing report content.
Why the Other Options Are Wrong
Option A: The workfile is a duplicate copy of the report delivered to the client
Option A, calling the workfile a duplicate copy of the report delivered to the client, is wrong because the workfile includes a copy of the report plus the supporting data and documentation.
Option B: The workfile excuses omitting content required by the report option
Option B, saying the workfile excuses omitting content required by the report option, is wrong because each report option has its own required content that must appear in the report.
Option C: The workfile must be delivered to the client along with each report
Option C, saying the workfile must be delivered to the client along with each report, is wrong because USPAP does not require delivery of the workfile with the report; it requires retention, access and retrieval.
Workfile backs, report speaks
The workfile backs up the conclusions; the report speaks to the client and must say what its report option requires.
How to use: Use backs-and-speaks to reject answers that let the workfile replace required report content.
Exam Tip
Choose the answer that keeps the workfile and the report as separate obligations, each with its own requirements.
Common Mistakes to Avoid
- -Treating the workfile as just a copy of the report
- -Omitting required report content because support is in the workfile
- -Believing the workfile must be sent to the client
Concept Deep Dive
Analysis
This question tests the relationship between the appraisal report and the workfile. The workfile holds the support for the appraiser's opinions and shows USPAP compliance, while the report must still meet its own content requirements. One cannot substitute for the other.
Background Knowledge
The Record Keeping Rule requires a workfile for each appraisal assignment, holding report copies, summaries of oral reports where applicable, and the support for the appraiser's conclusions. A Restricted Appraisal Report may need additional workfile information to be properly understood, but the report must still contain what that option requires.
Real-World Application
An appraiser keeps MLS printouts, adjustment grids and inspection photos in the workfile. Her Appraisal Report still summarizes the information analyzed and the reasoning, rather than simply referring the reader to the workfile.
More USPAP Questions
In a cost approach for an improved property, an appraiser estimates site value by sales comparison, allocation and extraction, then settles on one site-value figure before final reconciliation. How is this step best described?
An extraordinary assumption was reasonably supported, properly used and disclosed in an appraisal report. Later, the assumed information is found to be false. Which conclusion is best supported?
An otherwise applicable valuation approach cannot be developed reliably from the available data. The remaining scope can produce credible assignment results. What should the appraiser do?
May an appraiser use a hypothetical condition in any assignment?
An appraisal has a current effective date and permits an extraordinary assumption if its requirements are met. Which situation involves uncertain information rather than a fact known to be contrary to reality on that date?
Why must a report identify any real property interest that is being excluded from the value opinion?
Which review best helps explain divergent cost, sales-comparison and income indications?
Two value indications are $340,000 and $392,000. What is the difference as a percentage of the lower indication, rounded to one decimal place?
An unauthorized third party requests a lender-client’s report. No due-process or other permitted disclosure exception applies. How should the appraiser respond?
An appraiser proposes to assume there are no hidden defects. Which fact would characterize that assumption as extraordinary under the USPAP 2024 definition, rather than justify dismissing it as routine boilerplate?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Previous Question
In the cost approach, market extraction from three improved sales indicates total depreciation of 31%, 42% and 44%. The sale indicating 31% is closest to the subject in age, design and condition; the other two are older and less similar. How should the appraiser select the depreciation rate for the subject?
Next Question
For an older house, verified current sales support $430,000 while cost indicates $520,000. Current cost-new and site-value inputs have been verified. Which remaining cost input should be examined for possible overstatement of the indication?