Property Valuation
An appraiser who assigns a value above the contracted purchase price to justify a pre-determined value is committing:
AA. Normal appraisal practice
BB. Appraisal fraud — specifically 'appraisal inflation' or 'hitting the number'✓ Correct
CC. A professional opinion rather than a violation
DD. A standard buyer-friendly adjustment
Explanation
Inflating an appraisal to meet a contract price (rather than objectively determining market value) is appraisal fraud. It violates USPAP (Uniform Standards of Professional Appraisal Practice) and can result in criminal prosecution.
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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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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