Appraisal Standards, Ethics, and Professional Practice
Domain 4: Appraisal Standards, Ethics, and Professional Practice
This domain tests USPAP-type requirements: ethics, competency, scope of work, reporting, and record keeping. The exam rewards precise distinctions between intended use, intended user, extraordinary assumptions, and hypothetical conditions.
Core rules
- Ethics Rule: no accepting an assignment with a predetermined value; no advocacy; protect confidential client information; manage fees and contingencies so they do not bias the result.
- Competency Rule: accept only if competent or able to become competent before completing the assignment; disclose any lack of knowledge.
- Scope of Work Rule: the work must be sufficient to produce credible results for the intended use.
- An extraordinary assumption assumes a fact that, if false, could affect the value. A hypothetical condition assumes a condition contrary to what is known to exist, such as value subject to completion.
- Retain the workfile for the required period and include supporting data and correspondence.
Worked example
A client asks for an as-is value but refuses interior access. The appraiser may complete a report only if the scope of work still supports credible results; otherwise, the assignment must be declined or the limitation disclosed and its effect on credibility explained. The appraiser cannot simply label the value as-is while relying on unverified interior condition.
Traps
- Accepting an assignment outside your competency and disclosing it only afterward.
- Using a hypothetical condition to conceal a known fact.
- Letting a contingent fee or client pressure influence the value.
- Failing to state the intended user and use.
- Omitting the workfile because the report is short.