Certified Residential Appraiser Practice Exam

When appraising a property, how long of a sales history must be analyzed according to USPAP?

1. One year prior to appraisal

2. All sales within five years

3. All sales within three years

4. All sales from the last decade

The correct answer is: All sales within three years

The correct answer is based on the guidelines established by the Uniform Standards of Professional Appraisal Practice (USPAP), which indicates that an appraiser must analyze all sales of the property being appraised and comparable sales that occurred within the last three years. This time frame is significant because it allows the appraiser to understand market trends, property appreciation or depreciation, and the economic conditions affecting the subject property. By limiting the analysis to the last three years, the appraiser can focus on the most relevant data that directly reflects the current market while excluding older sales that may not accurately represent the current value. This approach helps maintain the reliability and credibility of the appraisal by ensuring the analysis is based on recent and applicable transactions. Sales histories extending beyond three years might include outdated market conditions that could distort the appraisal if heavily relied upon. Therefore, adhering to the three-year requirement ensures a closer connection to the property's current market environment, which is essential for accurate value assessment.