Appraisal Reviewer Report Analysis Flashcards
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Read the first 7 Appraisal Reviewer Report Analysis flashcards as text
A lender requests that a reviewer determine whether an appraisal report is acceptable for underwriting without developing an independent value opinion. Under USPAP, this is:
Answer: Permissible because the reviewer's scope of work can be limited to evaluating the quality of the work under review
USPAP Standard 3 allows the scope of work to be limited to reviewing work quality without requiring the reviewer to develop an independent value opinion.
When an appraiser applies a large net adjustment to a comparable sale, a reviewer should evaluate whether:
Answer: The comparable is sufficiently similar to the subject to be a credible indicator of value despite the adjustment magnitude
Large adjustments may indicate a comparable lacks sufficient similarity; the reviewer must assess whether the sale remains a credible value indicator regardless of percentage guidelines.
An appraisal review report that fails to identify the intended user(s) violates which USPAP requirement?
Answer: Standard 4, which requires the reviewer to identify the intended users in the review report
USPAP Standard 4 specifically requires the review report to identify the intended users of the review report itself.
A reviewer determines that the appraiser's cost approach depreciation estimate appears significantly understated. The best way for the reviewer to support this finding is to:
Answer: Present market-derived data, comparable sales analysis, or depreciation studies that indicate a higher depreciation rate
Credible review conclusions must be supported by market data or analysis, not just professional judgment alone.
Which situation would most appropriately trigger the use of a hypothetical condition in an appraisal review report?
Answer: The reviewer evaluates the property as if a proposed renovation described in the original appraisal has been completed
Evaluating a property as if a proposed improvement is complete when it is not is a classic hypothetical condition because it is contrary to known fact.
An appraiser's report uses the phrase 'as-is value' but the report was made subject to repairs. A reviewer should flag this as:
Answer: An inconsistency between the defined value premise and the appraisal conditions used
An 'as-is' value premise is inconsistent with a 'subject to repairs' condition; these represent different value premises that cannot coexist without explanation.
A reviewer completing a technical review for a federal financial institution must also ensure the appraisal complies with:
Answer: Both USPAP and the Interagency Appraisal and Evaluation Guidelines issued by the federal banking regulators
Federally regulated institutions must comply with both USPAP and the Interagency Appraisal and Evaluation Guidelines, which impose additional requirements beyond USPAP.