Term
| 4 Historical Events that Influenced Appraisal Standards |
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Definition
1. 1929 Stock Market Crash
2. Great Depression
3. Savings & Loan Crisis
4. Economic Meltdown in 2008-2009 |
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Term
| Prior to 1930 who did appraisals? |
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Definition
| Brokers and Real Estate Agents |
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Term
| Early 1930s what was developed |
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Definition
| First organized groups of professional appraisers |
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Term
| By 1950s and 1960s what was developed |
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Definition
| More organizations representing real estate appraisers |
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Term
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Definition
| Royal Institute of Chartered Surveyors |
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Term
| 3 Critical issues recognized by appraisal organizations |
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Definition
1. Availability of Credible Appraisal Services
2. Ethical and competent individuals
3. Creating public trust in a. the appraiser and b. the appraisal practice |
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Term
| The Appraisal Foundation (TAF) [private & has no government involvement] inlcudes 4 Boards, name them? |
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Definition
1. Appraiser Qualification Board (AQB)
2. Appraisal Standards Board (ASB)
3. Board of Trustees (BOT)
4. Appraisal Practices Board (APB) |
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Term
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Definition
| Appraisal Qualification Board |
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Term
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Definition
| Appraisal Standards Board |
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Term
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Definition
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Term
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Definition
| Appraisal Practices Board |
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Term
| Board of Trustees under the Appraisal Foundation, what is there role? |
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Definition
| Running the foundation, appointing officers, secures funding, monitors performance & oversight |
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Term
| Appraisal Standards Board under the Appraisal Foundation, what is there role? |
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Definition
| Creates content and make changes to USPAP, sets standards |
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Term
| Appraiser Qualifications Board under the Appraisal Foundation, what is there role? |
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Definition
| Comes up with the qualifications for : 1) Class 2) Degree 3) hours of experience 4) create state exam |
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Term
| Appraisal Practices Board under the Appraisal Foundation, what is there role? |
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Definition
| Provide timely voluntary guidance to appraisers via Valuation Advisories |
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Term
| Role of the Appraisal Foundation? |
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Definition
| An independent authority that place the public's interest ahead of any other constiuency. |
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Term
| The concept of public trust requires the appraiser to have/be: |
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Definition
1. Specialized knowledge
2. Experience
3. Objectivity/Impartiality
4. Independent
5. Integrity |
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Term
| Role of the Appraiser is to be: |
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Definition
| compentent, impartial, idependent & objecctive |
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Term
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Definition
| Financial Institutions Reform, Recovery & Enforcement Act of 1989 |
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Term
| What does Title XI of FIRREA do? |
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Definition
| Provided recognition and autorized financial institutions to be referenced USPAP in their regulations |
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Term
| Name some agncies that recognize and reference USPAP |
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Definition
| OMB, IRS, Executive Branch of Congress |
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Term
| The Appraisal Foundation (TAF) is: |
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Definition
A Non-Profit
Authorized by Congess
An organization made up of other organizations |
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Term
| The Appraisal Foundation (TAF) is NOT: |
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Definition
A government agency
A professional appraisal organization
A membership organization |
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Term
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Definition
| Promotes professionalism and ensure public trust in the valuation profession. |
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Term
| The Appraisal Subcommittiee [Goernment, authorized by Congress] |
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Definition
| Oversees the activities of the state appraisal licensure & certification agencies. Provides oversight, funding & services to ensure compliance with FIRREA |
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Term
| The Appraisal Foundation (TAF) & the Appraisal Subcommitte (ASC) |
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Definition
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Term
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Definition
| Valuation service performed by an individual acting in the role of an appraiser. |
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Term
| Other than appraisal or appraisal review, there are no record keeping or scope of work requirements in USPAP. True or False |
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Definition
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Term
| What appraisal services are covered by USPAP |
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Definition
| Appraisals, Appraisal Review, other services while acting in the role of an appraiser. |
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Term
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Definition
| Uniform Standards of Professional Appraisal Practice |
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Term
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Definition
Must include:
1. Name of Client
2. True copies of reports
3. Summaries of all reports, transcripts, etc,
4. All other data that supports appraisal opinion
5. Data to support any restricted appraisal reports |
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Term
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Definition
| 5 years after preparation / 2 years after final disposition |
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Term
| Preamble identifies the Purpose of USPAP |
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Definition
1. To promote and maintain a high level of public trust in the appraisal practice
2. Establish minimum requirements for appraisal practice |
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Term
| Preamble identifies Who benefits from USPAP |
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Definition
1. Providers of appraisal services
2. Users of appraisal services |
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Term
| Preamble indentifies When USPAP applies |
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Definition
| When the service or appraiser is obligated to comply by: law, regulation or agreement |
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Term
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Definition
| Independent, Impartial, Objective |
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Term
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Definition
| Appraisers must maintain the data, information & analysis to support their opinion. 5 years after preparation OR 2 years after any testimony (whichever is last) |
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Term
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Definition
| An appraiser's competency obligations in an assisgnment. |
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Term
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Definition
| The ability to judge what the problem is and execute a solution |
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Term
| Competency Rule (3) Sections: |
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Definition
1. Being Competent = Knowledge & Experience
2. Acquiring Competency = Get the skills
3. Lack of Competency = Can't do it, Decline or Withdraw |
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Term
| Jurisdictional Exception Rule |
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Definition
| Assignment condidtion established by applicable law, which precludes an appraiser from complying to only part of USPAP. |
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Term
| Jurisdictional Exception Rule - in order to apply the appraiser must? |
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Definition
1. Identify the law applicable to precldue compliance.
2. Comply with the law.
3. Disclose in the report the part of USPAP that was voided.
4. cite the law or regulation that requires the exception to USPAP compliance. |
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Term
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Definition
1. Problem Identification = Assignment elements.
2. Scope of Work Acceptability = must meet or exceed expectations.
3. Disclosure Obligations = SOW must be understood and disclosure of research used. |
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Term
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Definition
| Establishes fundamental obligations as part of the profession |
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Term
| Ethics Rule (3) Sections: |
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Definition
| Conduct, Management, Confidentiality |
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Term
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Definition
| Identified the purpose of, who benefits from and when USPAP applies. |
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Term
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Definition
| the Appraisal Subcommitte (ASC), enforced by Congress |
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Term
| The PREMBLE states that USPAP is for: |
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Definition
| appraisers and users of appraisal services |
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Term
| Valuation Services inlcude: |
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Definition
| real estate brokerage, appraisal reviews, & real property appraisals. |
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Term
| Who developed, interpreted and ammended USPAP? |
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Definition
| Appraisal Standards Board (ASB) |
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Term
| USPAP Advisory Opinions are issued? |
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Definition
| To illustrate the applicability of appraisal standards. Not officially part of USPAP. |
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Term
| Who maintains the national registry of certified & licensed appraisers? |
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Definition
| Appraisal Subcommitte (ASC) |
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Term
| Under the Ethics Rule, if appraiser worked on a property within 3 years they must: |
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Definition
| Disclose this to the client. |
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Term
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Definition
| Requires the appraiser to ISDARR |
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Term
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Definition
| Elaborates on the Competency Rule |
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Term
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Definition
| Define the Problem/Determine Scope of Work |
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Term
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Definition
| Data Collection & Analysis (Market Analysis & HBUA) |
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Term
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Definition
Application of 3 Approaches to Value (CSI)
1. Cost 2. Sales Comp 3. Income Capitalization |
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Term
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Definition
| Analyzes all agreements of sales, sales within 3 years of appraisal. |
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Term
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Definition
| Reconciliation of quality and quantity of data/approaches used to arrive at conclusion. |
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Term
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Definition
| Report of Value Opnion - Addresses the content and level of information. |
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Term
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Definition
| Addresses Written and Oral appraisal reports. |
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Term
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Definition
Identifies and describes report options.
Appraisal Report &
Restricted Appraisal Report (details use restrictions) |
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Term
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Definition
| Addresses certification requirements; similar to 3-6 |
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Term
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Definition
| States Oral Appraisal must set forth same data as an Appraisal Report. |
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Term
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Definition
An appraiser acting as a reviewer must:
1. Develop a credible opinion as to the quality of another appraiser’s work; and
2. Report the results of review assignment that is not misleading. |
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Term
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Definition
| Elaborates on requirements in the COMPETENCY RULE. |
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Term
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Definition
| Describes the steps necessary in developing an appraisal review. |
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Term
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Definition
reviewer must apply the appraisal review methods
and techniques that are necessary for credible assignment results. |
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Term
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Definition
Each written or oral Appraisal Review Report must be separate from the work under review and must
a. Clearly and accurately set forth the appraisal review in a manner that will not be
misleading.
b. Contain sufficient information to enable the intended users of the appraisal review
to understand the report properly.
c. Clearly and accurately disclose all assumptions, extraordinary assumptions, and hypothetical conditions used in the assignment. |
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Term
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Definition
| Describes the content of an Appraisal Review Report |
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Term
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Definition
| Addresses the certification requirements; Similar in general content to Standards Rule 2-3. |
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Term
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Definition
| Indicates that an oral appraisal review report must address the substantive matters set forth in Standards Rule 3-5; references the RECORD KEEPING RULE for corresponding requirements. |
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Term
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Definition
| Have been retired, but the remaining Standards were not renumbered. |
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Term
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Definition
Mass Appraisal, Development and Reporting / similar to STANDARD 3 which also covers both the
development and reporting of an appraisal review. |
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Term
| Standards Rules 6-1 through 6-7 |
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Definition
| Describe the development process |
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Term
| Standards Rules 6-8 and 6-9 |
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Definition
| deal with communicating the results |
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Term
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Definition
| The process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing. |
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Term
| STANDARD 6 & The JURISDICTIONAL EXCEPTION RULE |
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Definition
| The JURISDICTIONAL EXCEPTION RULE may apply to several sections of STANDARD 6 because ad valorem tax administration is subject to various laws (includes state, county, and municipal.) |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| Discusses the appropriate procedures and market information required as well as employing recognized techniques for specifying property valuation models and for calibrating mass appraisal models. |
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Term
| Standards Rules 6-5 and 6-6 |
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Definition
| Similar to Standards Rule 1-4 |
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Term
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Definition
| Similar to Standards Rule 1-6, and discusses reconciliation |
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Term
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Definition
Deals with reporting the results of a mass appraisal assignment.
Standards Rule 6-8(a) through (c) is similar in intent to Standards Rule 2-1.
The rest of the Rule is similar to Standards Rule 2-2, although there are no reporting options. Similar topics are addressed. |
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Term
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Definition
Specifies the certification required for all written mass appraisal
reports and is similar to Standards Rule 2-3. |
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Term
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Definition
| Ad Valorem Property Tax Appraisal and Mass Appraisal Assignments |
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Term
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Definition
Development requirements for a personal property appraisal
assignment / Similar to STANDARD 1 |
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Term
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Definition
Identifiable tangible objects that are considered
by the general public as being “personal.” |
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Term
| Major differences between STANDARD 7 and STANDARD 1 |
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Definition
1. Standards Rule 7-3(a) focuses on opinions of value in an appropriate
market rather than the use of the definition of highest and best use common in real property appraisals. Neither the components of the definition (legally permissible, physically possible, financially feasible, or maximally profitable) are used. Instead, in Standards Rule 7-3, the emphasis is on the current and alternative uses, appropriate
market or market level, and relevant economic conditions that exist on the effective date of valuation. The term market value is not as commonly used in personal property as it is in real property.
2. Personal property appraisals frequently involve multiple objects in a single appraisal assignment, and the value significance of these objects can vary greatly. Standards Rule 7-4(e) specifies that objects which are more significant to the assignment results should be the focus of the analysis.
3. Standards Rule 7-5 requires the analysis of prior sales that occurred within a reasonable and applicable time period, if relevant given the intended use of the appraisal and property type. This is different from Standards Rule 1-5 that requires a minimum history of three years prior to the effective date of the appraisal. |
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Term
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Definition
Personal Property Appraisal, Reporting - STANDARD 8 addresses the content and level of information required in communicating
the results of a personal property appraisal assignment. / Most of STANDARD 8 mirrors STANDARD 2 with regard to the topics covered, the order in which the topics are presented, and the specific handling of most topics. |
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Term
| Reference chart from AO-11 for use with Standards Rules 8-2(a) and (b) |
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Definition
| (a) Appraisal Report (b) Restricted Appraisal Report |
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Term
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Definition
| Addresses the development requirements for an appraisal of an interest in a business enterprise or intangible asset. / STANDARD 9 is similar to STANDARD 1 |
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Term
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Definition
| An entity pursuing an economic activity. |
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Term
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Definition
The interests, benefits, and rights inherent in the ownership of a
business enterprise including, stock, partnership interests, cooperatives, sole proprietorships, options, and warrants.) |
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Term
| Intangible Property (Intangible Assets) |
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Definition
| Non-physical assets, including franchises, trademarks, patents, copyrights, goodwill, equities, securities, and contracts as distinguished from physical assets such as facilities and equipment. |
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Term
| Major Differences between STANDARD 9 and STANDARD 1 |
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Definition
| 1. Standards Rule 9-2 differs from Standards Rule 1-2(c) in that the term “standard” is used rather than “type” of value, and the premise of value is referenced (see Standards Rule 9-2(c).) |
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Term
| Major Differences between STANDARD 9 and STANDARD 1 |
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Definition
2. Standards Rule 9-2 is the list of information needed to identify
the characteristics of the subject property such as ownership
percentage interest, accompanying elements of control and market. Whether or not the subject interest is a controlling or non-controlling interest of the business enterprise and its degree of marketability are major influences on value. |
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Term
| Major Differences between STANDARD 9 and STANDARD 1 |
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Definition
| 3. Standards Rule 9-3 is specific to business enterprise appraisal |
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Term
| Major Differences between STANDARD 9 and STANDARD 1 |
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Definition
| 4. Standards Rule 9-4 states that an appraiser must include in the analysis, when necessary for credible assignment results, data regarding past sale of capital stock or other ownership interests in the business enterprise being appraised. No specific time period is given for the study of these prior sales. |
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Term
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Definition
The content and level of information required in communicating
the results of an appraisal of an interest in a business enterprise or intangible asset. / Similar to STANDARD 2 |
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Term
| Key differences between STANDARD 10 and STANDARD 2 |
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Definition
1. STANDARD 10 does not contain any special discussion related to market value. Nor does it contain the discussion of highest and best use because this concept typically is not found in business enterprise and intangible asset appraisals.
2. There is one difference in the certification language. STANDARD 10 contains no reference to a personal inspection of the property, as one cannot inspect intangible assets. |
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Term
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Definition
| To promote and maintain a high level of public trust as well as confidence in professional appraisal practice. |
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