Certified Residential Appraiser Practice Exam

When reporting the results of a business appraisal, what type of report must the appraiser use?

1. Preliminary appraisal report

2. Appraisal report or restricted appraisal report

3. Full appraisal report only

4. Oral report

The correct answer is: Appraisal report or restricted appraisal report

In business appraisals, the appraiser must provide a report that clearly communicates their findings and the basis of their conclusions. The correct response indicates that the appraiser can utilize either an appraisal report or a restricted appraisal report depending on the needs of the client and the intended use of the appraisal. An appraisal report is comprehensive and provides detailed information, including the purpose of the appraisal, the methods used, data analyzed, and any conclusions reached. This type of report is suitable for instances where users need a full understanding of the appraisal process and outcomes. On the other hand, a restricted appraisal report, while still valid, offers limited detail and is usually designed for a specific audience who might not need the full extent of the information that a traditional appraisal report provides. This format typically includes just enough information for the client to understand the appraiser's analysis and conclusion. Both report types have their relevancies in practice. The option that emphasizes either an appraisal report or a restricted appraisal report captures the essential flexibility that appraisers have in tailoring their communications based on the objectives of the appraisal and the expectations of the client.