Property Valuation
A Colorado appraiser who has a personal relationship with the lender who ordered the appraisal, which could influence their judgment, must:
AA. Complete the appraisal and disclose the relationship in the report
BB. Decline the assignment if the relationship compromises their independence, or disclose and manage the conflict per USPAP if they can still provide an independent opinion✓ Correct
CC. Ignore the relationship as it has no bearing on value
DD. Only disclose the relationship after the appraisal is completed
Explanation
USPAP's Ethics Rule requires appraisers to maintain independence, objectivity, and impartiality. If a personal relationship with the client could compromise an appraiser's objectivity, they should decline the assignment.
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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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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