An Appraisal Report states that it develops market value but gives neither the applicable definition nor its source. Which correction addresses the missing content?
Correct Answer
A) State the applicable value definition and cite its source
An Appraisal Report must state the type and definition of value and cite the definition’s source under SR 2-2(a). A market-value label alone does not identify the governing definition, which can vary by assignment. Confidentiality language, insurance details, and another date do not supply the omitted content.
Why This Is the Correct Answer
Option A is correct because SR 2-2(a)(vi) requires the Appraisal Report to state the type and definition of value and cite the source of the definition. A market value label alone does not tell users which definition governs, and definitions can vary by assignment. Stating the definition and citing its source fills the gap.
Why the Other Options Are Wrong
Option B: State that the report is confidential and for the client
Option B says to state that the report is confidential and for the client. Confidentiality language does not supply the missing value definition or its source.
Option C: Add the appraiser’s insurance policy number to the report
Option C says to add the appraiser's insurance policy number. Insurance details are not part of the value definition requirement and do not fix the omission.
Option D: Replace the effective date with the inspection date
Option D says to replace the effective date with the inspection date. Changing a date does not address the missing definition, and the effective date is itself required content, so replacing it would create a new problem.
Define and cite
Say what value means in this report and where that definition comes from. A label without a definition and source is incomplete.
How to use: Use this when a report states a value type but leaves out its definition.
Exam Tip
For report-content fixes, choose the answer that supplies the specific missing element rather than unrelated additions.
Common Mistakes to Avoid
- -Thinking the words market value alone are enough
- -Stating a definition but omitting its source
- -Confusing the inspection date with the effective date
Concept Deep Dive
Analysis
This question tests SR 2-2(a)(vi), which requires an Appraisal Report to state the type and definition of value and cite the source of the definition. A report that just says market value without giving the definition or its source is missing required content. The correction is to add both.
Background Knowledge
Different market value definitions exist, for example those used by federal regulators or specific programs, and they can differ in their conditions. Citing the source lets users see exactly which definition applies. USPAP cautions appraisers to identify the exact definition and its authority.
Real-World Application
A reviewer notices a commercial Appraisal Report says it develops market value but never defines it. The appraiser revises the report to include the market value definition used by the lender's regulator and cites the regulation as its source.
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