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USPAP 2018-2019 Edition

© The Appraisal Foundation

45

STANDARD 7

(c) identify the type and definition of value, and ascertain whether the value is to be:

(i)

in terms of cash; or

(ii)

in terms of financial arrangements equivalent to cash; or

(iii) in other precisely defined terms; and

(iv) if the opinion of value is to be based on non-market financing or financing with unusual conditions or

incentives, the terms of such financing must be clearly identified and the appraiser’s opinion of their

contributions to or negative influence on value must be developed by analysis of relevant market data;

Comment: When reasonable exposure time is a component of the definition for the value opinion

being developed, the appraiser must also develop an opinion of reasonable exposure time linked to

that value opinion.

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(d) identify the effective date of the appraiser’s opinions and conclusions;

(e) identify the characteristics of the property that are relevant to the type and definition of value and

intended use of the appraisal, including:

(i)

sufficient characteristics to establish the identity of the item including the method of

identification;

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(ii)

sufficient characteristics to establish the relative quality of the item (and its component parts,

where applicable) within its type;

(iii) all other physical and economic attributes with a material effect on value;

Comment: Some examples of physical and economic characteristics include condition, style, size, quality,

manufacturer, author, materials, origin, age, provenance, alterations, restorations, and obsolescence. The

type of property, the type and definition of value, and intended use of the appraisal determine which

characteristics have a material effect on value.

(iv) the ownership interest to be valued;

(v)

any known restrictions, encumbrances, leases, covenants, contracts, declarations, special

assessments, ordinances, or other items of a similar nature if relevant to the assignment; and

(vi) any real property or intangible items that are not personal property but which are included in the

appraisal;

Comment on (i)–(vi): The information used by an appraiser to identify the property characteristics must

be from sources the appraiser reasonably believes are reliable.

An appraiser may use any combination of a property inspection and documents or other resources to

identify the relevant characteristics of the subject property.

When appraising proposed modifications, an appraiser must examine and have available for future

examination, documentation sufficient to identify the extent and character of the proposed modifications.

An appraiser may not be required to value the whole when the subject of the appraisal is a fractional

interest, a physical segment, or a partial holding.

(f) identify any extraordinary assumptions necessary in the assignment;

Comment: An extraordinary assumption may be used in an assignment only if:

72 See Advisory Opinion 7,

Marketing Time Opinions

, and Advisory Opinion 35,

Reasonable Exposure Time in Real Property and Personal

Property Opinions of Value.

73 See Advisory Opinion 2,

Inspection of Subject Property.

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