Property ValuationIntermediateDelaware Exam

What is an 'appraisal review' and why might it be needed in Delaware?

AA re-appraisal performed when the initial appraisal comes in below the purchase price

BA critical analysis by a review appraiser of another appraiser's report — evaluating the adequacy and appropriateness of the data, reasoning, and conclusionsCorrect

CA county review of all appraisals for property tax purposes

DA borrower's right to challenge an appraisal under federal law

Why A critical analysis by a review appraiser of another appraiser's report — evaluating the adequacy and appropriateness of the data, reasoning, and conclusions Is Correct

Answer B: A critical analysis by a review appraiser of another appraiser's report — evaluating the adequacy and appropriateness of the data, reasoning, and conclusions

An appraisal review involves a qualified review appraiser critically analyzing another appraiser's report for adequacy of data support, appropriateness of methods, and validity of conclusions. Lenders, AMCs, and government agencies use appraisal reviews to ensure quality control.

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.

Key Property Valuation Terms in This Question

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

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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.

Option Contract

A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

Loan-to-Value Ratio (LTV)

The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.

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.

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