Appraisal Reviewer Report Analysis Flashcards
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Read the first 7 Appraisal Reviewer Report Analysis flashcards as text
An appraiser reconciles the cost approach at $320,000 and the sales comparison approach at $295,000, then concludes $315,000. What concern should a reviewer note?
Answer: The reconciled value falls outside the range indicated by the approaches without explanation
A reconciled value that exceeds the highest approach indication without explanation is a credibility deficiency a reviewer must flag.
When reviewing adjustments in the sales comparison approach, a reviewer finds all comparable sales received the same dollar adjustment for location with no explanation. This suggests:
Answer: Possible unsupported or arbitrary adjustments requiring further justification
Identical adjustments across all comparables without market support or explanation indicate potentially unsupported, arbitrary figures.
A reviewer notes that the effective date of the appraisal under review is 18 months prior to the review date. What additional consideration applies?
Answer: The reviewer must consider whether market conditions have changed materially since the effective date
When significant time has passed, reviewers must assess whether market changes affect the continued reliability of the original appraisal.
In the context of appraisal review, what does 'workfile adequacy' refer to?
Answer: Whether the appraiser's documentation is sufficient to support the opinions and conclusions in the report
USPAP requires appraisers to maintain workfiles with sufficient data and analysis to support their report; reviewers assess whether this standard is met.
When reviewing an income approach, a reviewer finds the appraiser used a capitalization rate without citing any market data or extraction methodology. This is best characterized as:
Answer: An unsupported assumption that undermines the credibility of the income approach
Capitalization rates must be derived from and supported by market evidence; an unexplained cap rate represents an unsupported assumption.
A reviewer disagrees with the appraiser's highest and best use conclusion. The reviewer's report should:
Answer: State the reviewer's disagreement, provide the basis for the alternative conclusion, and assess the impact on value
USPAP Standard 3 requires reviewers to provide the basis for disagreement and assess its impact on the work being reviewed.
Which condition would most likely cause a reviewer to classify an appraisal as 'unacceptable' rather than 'acceptable with conditions'?
Answer: A fundamental USPAP violation such as a missing certification or undisclosed extraordinary assumption
Fundamental USPAP violations—such as a missing certification—render a report non-compliant and generally unacceptable rather than merely conditional.