Certified Residential Appraiser Practice Exam

Which types of value opinions are permitted when appraising a property with proposed improvements?

1. Only prospective value opinions

2. Only current value opinions

3. Both current and prospective value appraisals

4. No value opinions are permitted

The correct answer is: Both current and prospective value appraisals

When appraising a property with proposed improvements, both current and prospective value opinions are permitted to provide a comprehensive analysis. Current value opinions assess the property's worth as it stands, reflecting the existing conditions and features. This is essential for understanding how the property is valued in its present state. On the other hand, prospective value opinions consider the potential worth of the property after the proposed improvements are made. This type of valuation helps stakeholders, including buyers, investors, and lenders, understand the future value implications and the investment potential associated with the proposed changes. Allowing both types of value opinions in the appraisal process offers a more complete picture of the property's value, considering both its current status and its potential after enhancements. This dual approach is crucial for informed decision-making in real estate transactions involving properties with proposed changes.