Property ValuationIntermediateColorado Exam

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 opinionCorrect
CC. Simply ignore the relationship entirely since it supposedly has no bearing on value at all
DD. Only disclose the relationship after the appraisal is completed, though the precise application can differ somewhat from one county to the next, under typical circumstances

Why B. 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 Is Correct

Answer B: B. 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

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.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.

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