Question

When appraising a single-family home, an appraiser decides not to develop the income approach. What is the appraiser's requirement for reporting this on the URAR form?

a. State that the approach was not developed
b. Explain the reason the approach was not developed
c. Develop the approach anyway and keep it in the workfile
d. Nothing; the client does not expect the income approach to be developed on an appraisal of a single-family home

Answer 1

When appraising a single-family home, the appraiser is required to state that the income approach was not developed and explain the reason for it.

Step-by-step explanation:

When appraising a single-family home, if an appraiser decides not to develop the income approach, the requirement for reporting this on the URAR form is to state that the approach was not developed and to explain the reason the approach was not developed. The income approach is commonly used to determine the value of income-generating properties, but it may not be applicable to single-family homes where the income potential is not a significant factor in determining their value. Therefore, the appraiser should provide a clear explanation as to why the income approach was not considered.