SAEE SAEE - Valuation Reporting Requirements Questions and Answers 5 — Questions and Answers
Question 1: Under USPAP, the retention period for appraisal workfiles is at least:
- 2 years from the date of the report or 2 years after final legal resolution, whichever is later
- 5 years from the date of the report or 2 years after final legal resolution, whichever is later (Correct answer)
- 1 year from the date of the report
- 7 years from the date of the report for all assignments
Correct answer: 5 years from the date of the report or 2 years after final legal resolution, whichever is later
USPAP's Record Keeping Rule requires workfiles to be retained for at least 5 years from the date of the report or 2 years after final legal resolution, whichever is later.
Question 2: An appraisal review report prepared under USPAP Standard 3 must:
- Include the reviewer's own opinion of value in all cases
- State whether the reviewer agrees or disagrees with the work under review (Correct answer)
- Only review reports prepared by licensed trainees
- Be limited to a checklist format without narrative commentary
Correct answer: State whether the reviewer agrees or disagrees with the work under review
Standards Rule 3-2 requires the review appraiser to state whether they agree or disagree with the opinions, conclusions, and methodology in the work under review.
Question 3: A valuation report prepared for estate tax purposes must reflect value as of:
- The date the report is submitted to the IRS
- The date of death or the alternate valuation date elected by the estate (Correct answer)
- The date the property is listed for sale following death
- The date the appraiser inspected the property
Correct answer: The date of death or the alternate valuation date elected by the estate
For federal estate tax purposes, value is determined as of the decedent's date of death, or the alternate valuation date (6 months later) if elected by the estate.
Question 4: Which statement about intended use is CORRECT under USPAP reporting requirements?
- The intended use must match the client's actual use or the report is invalid
- The intended use must be stated in the report and affects the scope of work (Correct answer)
- Intended use is optional disclosure for residential reports under $1 million
- The intended use can be changed by the client after the report is delivered
Correct answer: The intended use must be stated in the report and affects the scope of work
USPAP requires the report to state the intended use, which directly influences the appropriate scope of work and the level of detail required.
Question 5: When an appraiser provides a value range rather than a point estimate of value, the report must:
- Convert to a Restricted Appraisal Report
- Explain why a range is appropriate for the assignment (Correct answer)
- Obtain written client consent for using a range
- Be rejected — USPAP requires single-point value opinions only
Correct answer: Explain why a range is appropriate for the assignment
USPAP permits an opinion expressed as a range but requires the report to explain why the range is appropriate for the specific assignment.
Question 6: In a retrospective appraisal (effective date in the past), market data used in the report should primarily reflect:
- Current market data to show the property's present relevance
- Data available as of the retrospective effective date (Correct answer)
- A blend of historical and current data equally weighted
- Only data from the 12 months preceding the report date
Correct answer: Data available as of the retrospective effective date
A retrospective appraisal must reflect market conditions as of the historical effective date, using data that would have been available at that time.
Question 7: When an appraiser updates a previously completed appraisal, USPAP requires the update report to:
- Repeat all analysis and narrative from the original report in full
- Identify the prior report, the effective date of the update, and incorporate or summarize necessary new information (Correct answer)
- Be signed only by the original appraiser of record
- Limit the effective date to no more than 90 days from the original
Correct answer: Identify the prior report, the effective date of the update, and incorporate or summarize necessary new information
An update appraisal must reference the prior report, state the new effective date, and include or summarize material changes in value-affecting factors since the original assignment.
SAEE SAEE - Valuation Reporting Requirements Questions and Answers 5
Under USPAP, the retention period for appraisal workfiles is at least: