CRU Property Appraisal & Valuation Flashcards
6 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CRU Property Appraisal & Valuation flashcards as text
What is 'functional obsolescence' in the context of residential appraisal?
Answer: Loss in value due to deficiencies or super-adequacies within the property
Functional obsolescence is a loss in value from features that are inadequate, outdated, or excessive relative to current market preferences.
An underwriter notices the appraiser used comparables located more than one mile from the subject in a dense urban neighborhood. What concern should this raise?
Answer: The distance may indicate the appraiser could not find truly comparable local sales
In dense urban markets, comparables beyond typical proximity may reflect a different sub-market, potentially distorting the subject's value.
Which condition in an appraisal report most directly triggers a requirement for a FHA/HUD repair escrow or completion certificate before closing?
Answer: Safety hazards, structural deficiencies, or property condition issues flagged as 'subject to repair'
FHA requires that health, safety, and structural deficiencies identified in the appraisal be corrected prior to or at closing via escrow or completion certificate.
What is the primary reason an underwriter would request an appraisal desk review or field review?
Answer: To independently verify the appraisal's credibility when value or methodology appears questionable
A desk or field review provides a secondary opinion to validate or challenge the original appraisal when the underwriter has concerns about accuracy or methodology.
Under USPAP's Competency Rule, what must an appraiser do if they lack the knowledge or experience to complete a specific appraisal assignment?
Answer: Disclose the lack of competency and either acquire the necessary competency or withdraw
USPAP requires appraisers to disclose competency limitations and take steps to gain competency or decline the assignment.
Which valuation method is most appropriate for a single-family home in a market with abundant recent comparable sales?
Answer: Sales comparison approach
The sales comparison approach is preferred for residential properties when sufficient market data exists because it directly reflects what buyers are willing to pay.