If an appraiser provides raw AVM output to a lender, the outcome is:

Study for your USPAP 15-Hour Course Test. Dive into flashcards and multiple choice questions, each equipped with detailed explanations. Prepare effectively for your appraisal certification!

The correct answer is that providing raw Automated Valuation Model (AVM) output to a lender is not classified as an appraisal, and therefore a workfile is not required. This is because an AVM produces a valuation based on mathematical models and algorithms using available data, without the analytical and judgment-based processes that a traditional appraisal requires.

In this context, an AVM’s output does not encompass the comprehensive analysis, inspection, and professional judgment typically involved in a formal appraisal process. Since it lacks those critical appraisal components, it does not adhere to USPAP regulations regarding appraisals, which includes the requirement for maintaining a workfile. The workfile is necessary to support conclusions and provide evidence of due diligence in the appraisal process, both of which are absent in mere AVM outputs.

Thus, when an appraiser presents this kind of information, it's important to clarify that the raw AVM output is informational and should not be considered a substitute for a formal appraisal with required documentation and standards.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy