Question

James is appraising a proposed new home, and he believes the cost approach is necessary for credible results. However, the URAR form states the cost approach is not required. What should he do?

a. Follow the instructions on the form and not complete the cost approach
b. Complete the cost approach
c. Not complete the cost approach, and invoke the DEPARTURE RULE
d. Ask his client if he needs the cost approach

Answer 1

James should complete the cost approach for a credible appraisal, despite what the URAR form states. He should also communicate with his client to discuss his decision.

Step-by-step explanation:

The URAR form, also known as the Uniform Residential Appraisal Report, is a standardized form used in real estate appraisal. While the form may state that the cost approach is not required, it is ultimately up to James to determine the best approach for a credible appraisal. In this case, if James believes that the cost approach is necessary for credible results, he should complete the cost approach despite what the form states.

James should prioritize his professional judgment and expertise in determining the appropriate approach for the appraisal. By completing the cost approach, he can provide a more comprehensive and accurate appraisal for the proposed new home.

It's important for James to communicate with his client as well. He may want to discuss his decision to complete the cost approach with the client and get their input. Ultimately, it's up to James to make an informed decision based on his expertise and the specific requirements of the appraisal.