Certified Residential Appraiser Practice Exam

In USPAP, what does the term ‘valuation service’ encompass?

1. Comparative Market Analysis (CMA)

2. Only full appraisals

3. Cost estimations

4. Survey strategies

The correct answer is: Comparative Market Analysis (CMA)

The term 'valuation service' in USPAP is broad and encapsulates various methodologies used to determine value. One of the primary components of valuation services is Comparative Market Analysis (CMA). CMAs are often utilized by real estate professionals to provide an estimate of a property's value based on the sale prices of comparable properties in the vicinity. This method considers current market conditions and is a valuable tool for both sellers and buyers in real estate transactions. Valuation services also include formal appraisals, but they extend beyond just full appraisals to encompass other approaches like CMAs, which do not require the same extensive methodology as a standard appraisal. While cost estimations and survey strategies may play a role in real estate evaluation, they do not specifically fall under the traditional understanding of valuation services as highlighted in USPAP. Thus, CMAs represent a crucial element of the broader category of valuation services, recognizing the flexibility and comprehensiveness of how property value can be assessed.