Basic Appraisal Procedures Mckissock Exam Questions with Answers

Valuation Process - Systematic set of procedures an appraiser follows to provide answers to a clients questions about real property value Appraisal Process - 1. Define Problem 2. Determine scope of work 3. Gather Record & verify dat 4. determine highest and best use 5. estimate land value 6. est. value by all three approaches 7. Reconcile est. value into final opinion value 8. report the final opinion defining problem - Identification and location of the real estate Identification of the property rights Definition of value Purpose and intended use of the appraisal Effective date of the opinion of value Any special limiting conditions identification and location of the real estate - usually with a legal description (metes and bounds, rectangular survey, lot and block) identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal Standards rule 1-2E of USPAP - Identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal market value - stated as an opinion that presumes the transfer of a property as of a certain date under specific conditions Appraisers are cautioned to - identify the exact definition of market value and its authority applicable in each appraisal completed for the purpose of market value Standards 1-2c of USPAP - identify type of value, if opinion to be developed market value, ascertain whether the value is to be the most probable price: terms of cash; terms of financial arrangements equ. to cahs; other terms; if not market value must be clearly identified purpose of the assignment - objective of assignment. ex: to develop an opinion of the defined value of a specified interest in real estate intended user - client and any other party as identified by name or type as users of the appraisal review report by the appraiser retrospective and prospective value - Two dates are essential to an appraisal report. Standards Rules 2-2(a)(vi) and 2-2(b)(vi) and 8-2(a)(vi) and 8-2(b)(vi) require that each appraisal report specify the effective date of the appraisal and the date of the report standards 1-2d of USPAP - identify the effective date of the appraisers opinions and conclusions extraordinary assumption - an assignment specific assumption as of the effective date if which found to be false could alter the appraisers opinions or conclusions hypothetical edition - condition directly related to specific assignment which is contrary to what is known by the appraiser to exist on the effective date of assignment results but is used for the purpose of analysis Advisory opinions-22 os USPAP - Accomplishing the first four action steps (SR 1-2(a) through (d))... ...provides the basis for deciding which of the property's characteristics are relevant in the assignment determine scope of work - the type and extent of research and analysis or appraisal review assignment advisory opinion-22 - understanding whihc analysis methods and techniques are necessary and what data are necessary to correctly complete the analysis is an integral part of the scope of work decision standards rule 1-2h of USPAP - determine the scope of work necessary to produce credible results in accordance with the SCOPE OF WORK RULE scope of work rule - identify problem; determine and perform the scope of work necessary to develop credible assignment results; disclose scope of work in the report scope of work includes but is not limited to: - the extent to which the property is identified; the extent to which tangible property is inspected; the type and extent of data researched; and the type and extent of analyses applied to arrive at opinions or conclusions. standards rule 2-2a in USPAP - summarize the scope of work used to develop the appraisal workfile - documentation necessary to support an appraiser's analyses, opinions, and conclusions record keeping rule - an appraiser must prepare a workfile for each appraisal or appraisal review assignment