Why should an appraiser disclose that a valuation model informed the analysis?
Correct Answer
D) The reader is entitled to know what the work rests on
Why this is correct: The governing concept is scope of work disclosure under USPAP. The appraiser must disclose significant assumptions and methods so intended users can understand the basis for the value conclusion. The original explanation states that disclosure allows users to judge the support for the conclusion. Why the other choices are wrong: "Model use requires the client's written pre-approval" is wrong; while client instructions are considered, specific pre-approval for model use is not a universal requirement. "Disclosure shifts responsibility to the model vendor" is wrong; the appraiser remains responsible for the analysis. "Models may only be used in restricted assignments" is wrong; models can be used in various assignments if appropriate. Exam tip: Disclosure is about transparency for the user's benefit, not about transferring liability.
Why This Is the Correct Answer
Why this is correct: The governing concept is scope of work disclosure under USPAP. The appraiser must disclose significant assumptions and methods so intended users can understand the basis for the value conclusion. The original explanation states that disclosure allows users to judge the support for the conclusion. Why the other choices are wrong: "Model use requires the client's written pre-approval" is wrong; while client instructions are considered, specific pre-approval for model use is not a universal requirement. "Disclosure shifts responsibility to the model vendor" is wrong; the appraiser remains responsible for the analysis. "Models may only be used in restricted assignments" is wrong; models can be used in various assignments if appropriate. Exam tip: Disclosure is about transparency for the user's benefit, not about transferring liability.
More emerging-appraisal-methods Questions
An appraiser consults a geographic information system for parcel boundaries. What limitation applies?
How does an alternative inspection method affect the appraiser's disclosure obligations?
A collector's photographs show a condition the appraiser believes needs specialist assessment. What is the appropriate step?
What responsibility does an appraiser retain for an error originating in a third-party database?
Under current USPAP guidance, what is the output of an automated valuation model before an appraiser analyzes it?
A lender's guidelines require an interior inspection, but the client asks for a desktop product to save time. What should the appraiser do?
How should an appraiser respond to a client requesting a shorter turn time than credible results allow?
Which assignment type still requires the appraiser to develop an opinion of value?
An appraiser relies on a published capitalization rate survey. What must be considered?
A model returns an estimate far from the appraiser's own conclusion. What is the appropriate response?
People Also Study
Valuation Principles & Procedures
25% of exam
Property Description & Analysis
20% of exam
Market Analysis & Highest/Best Use
15% of exam
Appraisal Math & Statistics
15% of exam
USPAP (Ethics & Standards)
15% of exam