ASFMRA RPRA flashcards
ASFMRA RPRA · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Standard 3
- USPAP standard governing appraisal review: the reviewer must identify the review's intended use, scope of work, and the appraisal under review, and develop an opinion on the quality of the work.
- Standard 4
- USPAP standard governing the review report: the reviewer must state the scope of work, the review opinion, and-if the reviewer's value differs-the reviewer's own value conclusion and its support.
- Desk review
- A review performed without a physical inspection of the property, relying on the report, public records, and market data; scope is narrower than a field review.
- Field review
- A review that includes an exterior or interior inspection of the subject property to verify the original report's physical data and market observations.
- Reviewer's own opinion
- When a reviewer disagrees with the original value, the reviewer must develop and report an independent value conclusion supported by the reviewer's own analysis.
- Scope of work
- The amount and type of research and analysis required to produce credible assignment results; it is assignment-specific and must be disclosed in the report.
- Extraordinary assumption
- A condition directly affecting the assignment that, if false, would change the reviewer's or appraiser's opinions; it must be disclosed and its effect analyzed.
- Hypothetical condition
- A condition contrary to what exists but assumed for analysis, such as valuing a property as if a proposed improvement were complete; it must be clearly disclosed.
- Capitalization rate
- A rate that converts a single year's net operating income into an indication of value: Value = Net Operating Income ÷ Capitalization Rate.
- Productivity value
- An income-based farmland value derived by capitalizing the expected long-run net return per acre based on soil yield potential at a market-derived rate.
- Cash rent vs share rent
- Cash rent pays a fixed amount per acre; share rent splits crop proceeds and expenses between landlord and tenant, producing different income streams to normalize.
- Contributory value
- The market value an improvement or component adds to a property, used in sales comparison adjustments for farm buildings, bins, or irrigation systems.
- Water rights
- A legal interest in the use of water that may be separate from the land; it must be identified and valued separately in rural appraisals.
- Conservation easement
- A partial interest that restricts development or use of land; it reduces the fee simple value and must be identified and analyzed separately from the land.
- Highest and best use
- The reasonably probable, legally permissible, physically possible, financially feasible, and maximally productive use of a property that supports the value conclusion.
- Economies of scale
- The tendency of per-acre value to decline as parcel size increases, requiring size adjustments in farmland sales comparison analysis.
- Animal unit
- A unit of comparison in ranch and livestock property valuation based on carrying capacity, used to compare grazing properties of different sizes.
- Capitalization derivation
- Cap rates for farmland are derived from comparable sales (market extraction), investor surveys, or band of investment combining debt and equity rates.
- Credibility standard
- USPAP's test that an assignment's analyses and conclusions must be worthy of belief given the intended use and the scope of work performed.
- Competency Rule
- A reviewer must have or acquire the knowledge and experience to complete the assignment competently; if not, the limitation must be disclosed or the assignment declined.
- Jurisdictional exception
- A USPAP provision that allows departure from a standard when it conflicts with law, limited to the extent of the conflict and requiring disclosure of the authority.
- Workfile retention
- Records supporting the review must be retained for at least five years after the report date, or two years after final disposition of litigation, whichever is later.
- Review findings
- Specific deficiencies identified in the work under review, such as unsupported adjustments, inadequate highest and best use analysis, or internal inconsistencies.
- Intended use
- The purpose for which the review is performed and the parties who will rely on it; it drives the scope of work and the review's credibility standard.
- Data verification
- Independent confirmation of market data and property characteristics used in the original report, a core review step supporting the reviewer's opinion.
- Reconciliation
- The process of weighing indications from multiple approaches into a final value conclusion; the reviewer must test whether the original reconciliation is supported.
- Ethics Rule
- USPAP rule prohibiting misrepresentation, misleading reporting, and acceptance of assignments contingent on a predetermined result or value.
- Contingent fee prohibition
- Compensation may not be contingent on the value conclusion, loan approval, or a predetermined result; the fee must reflect the assignment's scope.
- Confidentiality Rule
- Client information is confidential and may be disclosed only as authorized by the client, required by law, or necessary to complete the assignment.
- Signing another's report
- A reviewer may not sign a report prepared by another appraiser unless the reviewer performed the required analyses and accepts responsibility for its content.
- ASFMRA accreditation
- Professional recognition requiring documented experience, education, and demonstration of appraisal competence, with periodic continuing education to maintain good standing.
- Independence disclosure
- A reviewer must disclose prior involvement with the property or its appraiser and decline assignments where a financial or personal interest affects objectivity.