Appraisal Practice and USPAP
What the exam tests
Domain 1 covers the architecture of USPAP and the practical decisions it forces: what belongs in the workfile, whether you are competent for this assignment, how much work is enough, and what the report must disclose. Most questions are scenarios where the answer turns on one rule.
Core rules
- USPAP is issued by the Appraisal Standards Board of The Appraisal Foundation; your state adopts an edition, so identify the version in effect.
- Standards 1 and 2 govern development and reporting of a real property appraisal; 3–4 review; 5–6 mass appraisal; 7–8 personal property; 9–10 business valuation.
- Competency Rule: apply it before acceptance. If a gap is discovered later, disclose it to the client, take steps to complete competently (study, consult, associate), and disclose the resolution in the report.
- Scope of Work Rule: the work must be sufficient for credible assignment results, judged against the client's expectations, intended use, and what peers would do.
- Record Keeping: retain the workfile five years after delivery, or two years after final disposition of a judicial proceeding, whichever is later.
- Two reporting options: Appraisal Report (summarizes the data and analysis) and Restricted Appraisal Report (states the use is limited to the client and any named intended user).
Worked example
A lender orders an appraisal of a duplex whose ground-floor office is a legally nonconforming use. You have never appraised mixed-use property. You may accept only if you disclose the gap, take steps such as researching the zoning ordinance and consulting a peer, and state that disclosure and resolution in the report. If the client later wants the borrower to receive a copy, the Restricted Appraisal Report is unavailable - the report must be an Appraisal Report.
Traps
Confusing a hypothetical condition (known to be false) with an extraordinary assumption (uncertain but reasonable). Failing to build a workfile for an assignment never delivered. Treating scope of work as a fixed checklist instead of a problem-specific judgment.