Property Valuation
Under USPAP, an appraiser's assignment must identify the intended use and intended user because:
AAREC requires it for all property sales
BThe scope of work and the value conclusion may vary depending on who will use the appraisal and for what purpose✓ Correct
CIt reduces the appraiser's liability in court
DIt is required only for commercial appraisals
Explanation
USPAP requires identifying the intended use (lending, insurance, estate, etc.) and intended user because these factors affect the scope of work and what type of value is being estimated.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
State-Specific Concepts
AREC Regulation
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