What must the certification state about the appraiser's compensation?
Correct Answer
D) That it was not contingent on the outcome
Why this is correct: The certification must state that the appraiser's compensation is not contingent on the reporting of a predetermined value, the direction of value, or the occurrence of a subsequent event. This addresses independence and impartiality. Why the other choices are wrong: The exact amount paid is not required. Stating the fee was customary and reasonable does not address the contingency issue. Stating the invoice was paid in full is irrelevant to independence. Exam tip: Certification focuses on the nature of compensation (non-contingent), not the amount.
Why This Is the Correct Answer
Why this is correct: The certification must state that the appraiser's compensation is not contingent on the reporting of a predetermined value, the direction of value, or the occurrence of a subsequent event. This addresses independence and impartiality. Why the other choices are wrong: The exact amount paid is not required. Stating the fee was customary and reasonable does not address the contingency issue. Stating the invoice was paid in full is irrelevant to independence. Exam tip: Certification focuses on the nature of compensation (non-contingent), not the amount.
More USPAP Questions
Reconciliation of the approaches to value is best described as which activity?
Why should the reconciliation address the quantity of evidence as well as its quality?
How long must a report be retained compared with the workfile?
What distinguishes an appraisal review from an appraisal?
An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
What should the reconciliation section explain to the reader?
How do the content obligations of the two report options differ with respect to the information analyzed?
The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
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