Certified Residential Appraiser Practice Exam

If an appraiser discovers that a single-unit dwelling is actually a three-unit dwelling upon inspection, what should they do?

1. Proceed with the appraisal as planned

2. Reconsider the scope of work before proceeding

3. Document the discrepancy in the report

4. Consult the client before making changes

The correct answer is: Reconsider the scope of work before proceeding

When an appraiser discovers that what they believed to be a single-unit dwelling is actually a three-unit dwelling, it is crucial to reconsider the scope of work before proceeding with the appraisal. The reason for this is that the identification of the property type significantly impacts the valuation process, including the methodologies and comparables used. Reassessing the scope of work allows the appraiser to determine the appropriate appraisal approach for a multi-unit property, which differs from a single-family residence. For instance, a three-unit dwelling may require a different assessment of rental income potential, operating expenses, and market analysis relevant to multi-family properties. This reconsideration ensures the appraisal is accurate and compliant with the relevant standards and guidelines. Taking the time to redefine the scope does not only prevent potential valuation errors but also aligns the appraisal report with the actual characteristics and market conditions of the property in question. By addressing the nature of the dwelling upfront, the appraiser can produce a more reliable and comprehensive report.