California Real Estate Salesperson Exam Practice - Question 77

Question

Which of the following appraisal reports would be the most comprehensive and complete? 

Selections

A. Narrative

B. Certified

C. Letter

D. Printed form

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Answer: A

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5 Keys Summary

• The Narrative report is considered the most comprehensive and complete type of appraisal report.

• A narrative report is detailed and lengthy, functioning as a complete document that includes all pertinent information, reasoning, and computations for the value conclusion.

• This report format is typically used for complex valuation problems, such as court cases, eminent domain actions, or when an extensive report is necessary.

• In comparison, a Form report is a shorter, standardized format (like the Uniform Residential Appraisal Report) frequently used by lenders, government agencies, and is classified as a Summary Report.

• The Letter report is the simplest and briefest appraisal format, often only one or two pages, intended for use when the client is familiar with the area and extensive supporting data is not required.

Explanations

A narrative report is considered the most comprehensive and complete appraisal report because it is detailed and lengthy [principlesLS, 511]. These reports are often employed for complex cases that require extensive analysis, such as eminent domain cases or legal disputes. It is designed to be "filled with many details" to ensure a thorough and complete analysis.

In contrast:

A letter report is the briefest, usually only one to two pages, and is used in simpler situations.

A form report is a shorter report presented on a standardized form, typically used by lenders and government agencies like FHA and VA for more common transactions.

Concepts Definitions

• Appraisal Report: A document that presents an appraiser's estimate or opinion of a property's value as of a specific date [principlesLS, 511].
• Narrative Report: A detailed and lengthy appraisal report that includes extensive analysis and is often used for complex situations or legal cases, such as eminent domain.
• Form Report: A shorter appraisal report presented on a standardized form, commonly used by lenders and government agencies (like FHA and VA) for residential mortgage loans . The Uniform Residential Appraisal Report form is an example of this type.
• Letter Report: The simplest and shortest type of appraisal report, typically consisting of one to two pages