Under USPAP's Scope of Work Rule, which applies to all California-licensed appraisers, who is responsible for determining the appropriate scope of work for an appraisal assignment, and on what basis?
Correct Answer
B) The appraiser determines the appropriate scope of work based on the intended use, the needs of the intended users, and the complexity of the property, and must produce credible results
USPAP's Scope of Work Rule places the responsibility for determining the appropriate scope of work on the appraiser. The appraiser must consider the intended use of the appraisal, the needs of the intended users, and the complexity of the subject property. The selected scope must be sufficient to produce credible assignment results. This includes the appraiser's professional judgment about which approaches to value to apply and the depth of analysis required — it is not a one-size-fits-all standard.
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Related Topics & Key Terms
Key Terms:
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Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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- → The appraisal approach that estimates value by comparing a property to similar recently sold properties is the:
- → The period of time a structure continues to earn sufficient income to continue operations is referred to as the structure’s:
- → An appraiser in California is using the cost approach for a property in Sacramento and must account for entrepreneurial profit (also called developer's profit). A local developer confirms that typical profit margins in the Sacramento market are 15-20% of total development costs. How should the appraiser handle entrepreneurial profit?
- → A California buyer's agent is reviewing comparable sales data and notices that the county recorder's office lists different documentary transfer tax amounts for similar properties in the same city. Some properties show both a county and city transfer tax, while others show only the county tax. What does this difference indicate about the sale verification process?
- → When conducting a sales comparison analysis in California, an appraiser discovers that the subject property has an Accessory Dwelling Unit (ADU) that was built under California's recent ADU legislation. How should the appraiser handle this feature?
- → A California real estate agent is selecting comparable sales for a CMA on a property in Fresno. The agent finds a sale from 14 months ago in the same neighborhood. Under standard California CMA practice, why might the agent hesitate to use this comparable?
- → A California real estate licensee is preparing a CMA and notices that one comparable property sold in a foreclosure auction conducted by a trustee under a deed of trust. How should this sale be handled in the CMA?
- → Compared to other appraisal factors, appraisers generally find the the most difficult calculation to measure precisely.
- → When a comparable sale used in an appraisal was not an arm’s length transaction, this affects the:
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