Certified Residential Appraiser Practice Exam

What factor could lead to a violation of USPAP if used to set an appraisal fee?

1. The market value of the property

2. The appraiser's value opinion

3. The property size

4. The time taken for the appraisal

The correct answer is: The appraiser's value opinion

Setting an appraisal fee based on the appraiser's value opinion could lead to a violation of USPAP (Uniform Standards of Professional Appraisal Practices) because it creates a conflict of interest. USPAP emphasizes that an appraiser must maintain objectivity, impartiality, and independence throughout the appraisal process. If an appraiser were to set their fee based on the value they personally assign to a property, it could raise concerns about the integrity of the appraisal, as the fee might incentivize the appraiser to skew their value opinion to justify a higher fee. In contrast, setting a fee based on the market value of the property, the size of the property, or the time taken for the appraisal is more acceptable within the framework of USPAP because these factors generally relate to the costs associated with conducting the appraisal. They do not compromise the appraiser's objectivity or the independence necessary for providing an unbiased opinion of value. By adhering to established and neutral criteria for fee determination, appraisers can assure compliance with ethical standards and maintain the credibility of their work.