Commercial Appraisal Review - Subject Matter Elective ||
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Which of the following conditions is a review appraiser NOT permitted to accept in an appraisal
review assignment?
Requiring an effective date of value different than the effective date in the appraisal under
review
Reviewing an appraisal of a property in a state in which the reviewer is not currently licensed
An attorney wants to use the review to assist in formatting questions to attack the appraisal in
cross-examination of the appraiser
Requiring the use of a highly improbable hypothetical condition in revising the value in the
appraisal correct answers Requiring the use of a highly improbable hypothetical condition in
revising the value in the appraisal
You are reviewing an appraisal that had an effective date of January 15, 2005, for the "as is"
value and an effective date of January 15, 2006 for the prospective value. The report's date is
February 15, 2005. Which edition of USPAP will you use to guide you in the performance of
YOUR appraisal review?
2005 edition of USPAP
2006 edition of USPAP
2008 edition of USPAP
The current edition of USPAP correct answers The current edition of USPAP - Chapter One,
Introduction - The current edition of USPAP will guide the reviewer in his activity, as the
activity is NOW. The 2005 edition of USPAP would be used to evaluate the appraisal, because
the appraiser cannot be expected to comply with requirements not in effect when the appraisal
was performed and the report prepared.
While performing an appraisal review for a loan underwriting department, you need to contact
the appraiser to discuss some issues. Which statement below is correct?
You need to be diplomatic in your communications with the appraiser.
You need to teach the appraiser the proper methodologies where he or she has erred.
You need to send the appraiser a letter detailing the required changes and let him or her know
you will withhold payment of fees until they are corrected.
You should not personally communicate with the appraiser because it will compromise your
objectivity. correct answers You need to be diplomatic in your communications with the
appraiser.
What are the two kinds of review appraiser positions described in the course materials?
Staff review appraisers and fee review appraisers
Desk review appraisers and field review appraisers
Government review appraisers and private sector review appraisers
Administrative review appraisers and technical review apprasiers correct answers Staff review
appraisers and fee review appraisers
,Complete the following statement taken from The Appraisal of Real Estate, 13th edition: "The
primary function of the appraisal reviewer is not to appraise the subject property but to examine
the contents of a report and form an opinion as to its __________ and ________________ ."
form and content
readability and accuracy
adequacy and appropriateness
reliability and sufficiency correct answers adequacy and appropriateness - Chapter One, Starting
the Research - The quotation reads: "The primary function of the appraisal reviewer is not to
appraise the subject property but to examine the contents of a report and form an opinion as to its
adequacy and appropriateness."
What is the primary function of the appraisal reviewer?
Form an opinion about the value of the subject property
Approve the appraisal for the underwriting department
Approve the appraiser's value opinion
Form an opinion regarding the adequacy and appropriateness of the appraisal report correct
answers Form an opinion regarding the adequacy and appropriateness of the appraisal report
Why must a review appraiser have good communication skills as well as good analytical skills?
His or her writing must be precise and unambiguous
He or she must be able to communicate in a positive manner with the appraiser who completed
the original report
A review appraiser may find herself being interviewed by the local news anchor about her report
He needs to be able to give clear instructions to the loan underwriting department so they will
use the appraisal properly correct answers He or she must be able to communicate in a positive
manner with the appraiser who completed the original report - Chapter One, Defining the
Problem - "Then I have to have the communication skills to have a discussion with the appraiser
to tell him how he messed up. But I have to point out his problems without making him feel like
I just leveled criticism at him."
Which of the following is NOT one of the four purposes of an appraisal review?
Quality control
Compliance
Due Diligence
Litigation support correct answers Due Diligence - Chapter One, Purpose of Appraisal Review -
The four purposes were Quality Control, Compliance, Risk Management, and Litigation Support.
Which would be considered an improper motivation for a review appraiser?
Determine whether the original appraiser used the best comparable data
Identify all the problems contained in the appraisal report, to prove his or her superior
competence
Determine whether the appraiser who wrote the report used reasonable assumptions
Identify any inconsistencies in the appraisal process used by the original appraiser correct
answers Identify all the problems contained in the appraisal report, to prove his or her superior
competence
,What does a lending institution's staff reviewer generally do when an appraisal report does not
comply with regulatory standards?
Reject the appraisal
Contact the appraiser, discuss the deficiencies, and suggest adjustments to be considered
Report the appraiser to the state licensing agency for discipline
Correct the mistakes in the appraisal and forward the corrected appraisal report to the client
correct answers Contact the appraiser, discuss the deficiencies, and suggest adjustments to be
considered
Which STANDARD in USPAP governs the development of an appraisal review?
STANDARD 4
STANDARD 3
STANDARD 2
STANDARD 1 correct answers STANDARD 3
You are asked to review an appraisal of a casino located on Native American lands. You have
never appraised this type of property, but decide to accept the assignment. Which of the
following would NOT satisfy the competency requirements in USPAP to perform this appraisal
review?
Joint venture the review assignment with an appraiser from Nevada who has appraised several
casinos
Take a seminar from a nationally-recognized education provider covering the appraisal of
gaming properties
Read and study literature dealing with casino property valuations
None, as competency is not an issue when simply performing an appraisal review correct
answers None, as competency is not an issue when simply performing an appraisal review -
Chapter One, Competency Requirements - USPAP requires that the person who performs a
review appraisal "...must determine, prior to accepting an assignment, that he or she can perform
the assignment competently. Competency requires: 1. the ability to properly identify the problem
to be addressed; and 2. the knowledge and experience to complete the assignment competently;
and 3. recognition of, and compliance with, laws and regulations that apply to the appraiser or to
the assignment." Any of the first three choices could satisfy the requirement for obtaining
competency.
Which of the following four "types" of appraisal reviews can be performed without an appraiser
license or certification, without violating USPAP?
Administrative
Technical
Desk
Field correct answers Administrative - Chapter One, Types of Appraisal Review - An
administrative review is sometimes called a compliance review. Those who perform
administrative reviews may find the outline provided by STANDARD 3 to be helpful, but they
are not bound to observe the standard. Although "desk review" can be an administrative review,
a "desk review" can also be technical review which would require the reviewer to be licensed or
certified. Therefore, "Administrative review" is the best answer.
, An accountant (not licensed as an appraiser) is reviewing an appraisal for a client. Which of the
following tasks would fall outside of his authority to perform an administrative review?
Checking the math calculations
Comparing the engagement letter requirements with the components of the appraisal
Evaluating the merits of the reconciliation analysis
Checking county records to verify the comparable sales dates correct answers Evaluating the
merits of the reconciliation analysis
Your personal attorney requests a meeting to help prepare questions for cross examination of the
opposing party's appraiser. You go over the appraisal report, pointing out several weak areas, and
help him frame some questions to pose to that appraiser on the witness stand. However, you do
not read the entire report and make no other file notations for your records. You do this as a
"professional courtesy" and do not charge a fee for this consultation. Which of the following is
TRUE?
You have performed an appraisal review but, because you are not going to testify, USPAP does
not apply.
You have performed an appraisal review, as defined in USPAP.
It is not necessary to create and maintain a workfile when performing an appraisal review.
USPAP compliance is not necessary because no fee has been charged. correct answers You have
performed an appraisal review, as defined in USPAP. - Chapter One, Competency Requirements
- Any report, oral or written, about the quality of another appraiser's work product, is an
appraisal review and falls under USPAP STANDARDS 3 and 4. Whether you charged a fee is
irrelevant, as is whether or not you will testify in court about your review. As an appraiser, you
cannot advocate for a client; you are to be unbiased. Helping an attorney frame questions for
testimony is not considered advocating for a client.
What type of review can be performed by the clerical support staff of the bank vice president?
Desk review
Field review
Administrative review
Technical review correct answers Administrative review
You have never performed an appraisal of a marina property, but have been asked to review an
appraisal of a marina. You want to accept the assignment. Your response MUST be
Decline the assignment
Notify the client that you do not have the competence to perform the review when you accept the
assignment
Accept the assignment upon payment of a retainer fee
Find an appraiser who does have the competence and affiliate yourself with him/her correct
answers Notify the client that you do not have the competence to perform the review when you
accept the assignment - Chapter One, Competency Requirements - The same requirements of
competency exist for appraisal review under Standard 3 as exist for performing an appraisal
under Standards 1 and 3: " If an appraiser determines he or she is not competent prior to
accepting an assignment, the appraiser must: 1. disclose the lack of knowledge and/or experience
to the client before accepting the assignment; 2. take all steps necessary or appropriate to
complete the assignment competently; and 3. describe in the report the lack of knowledge and/or
