Property Valuation
A West Virginia appraiser who omits negative information from an appraisal report to achieve a value requested by the lender is engaging in:
AStandard appraisal practice when market data is limited
BAppraisal fraud (value manipulation), which violates USPAP and federal law✓ Correct
CA reasonable client accommodation
DAn acceptable practice if the appraiser believes the value is supportable
Explanation
An appraiser who omits material negative information to achieve a predetermined value is committing appraisal fraud. This violates USPAP's requirements for impartiality and objectivity and may violate federal law, including the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
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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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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