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Can a real estate licensee prepare an appraisal for a new loan on property that the broker has listed for sale?

Rationale

No, real property appraisal is not an authorized activity for a real estate broker.

Real estate brokers are not licensed to perform appraisals unless they hold a specific appraiser license. The appraisal process requires a distinct set of qualifications and adherence to regulatory standards that differ from those governing real estate brokerage activities.

A (Yes, if the appraisal is identified as a comparative market analysis.) YOUR ANSWER

A comparative market analysis (CMA) is not the same as an appraisal; it is merely a tool used by real estate agents to assess a property's market value based on recent sales of similar properties. While CMAs provide useful insights for pricing, they do not meet the formal standards and requirements of an appraisal, which necessitates a licensed appraiser.

B (Yes, if the appraisal is done before an offer to purchase is accepted by the seller.) YOUR ANSWER

The timing of the appraisal does not change the fact that a real estate broker is not authorized to conduct appraisals without the appropriate license. Regardless of when the appraisal occurs, it still must be performed by a qualified appraiser to ensure legal compliance and accuracy.

C (Yes, with proper disclosure to the lender about the broker's qualifications.) YOUR ANSWER

Even with disclosure, a real estate broker cannot legally perform appraisals unless they possess the necessary appraiser license. Disclosure does not grant the authority to conduct activities that are outside the scope of the broker's licensure.

Conclusion

In summary, real estate brokers are prohibited from preparing appraisals unless they are licensed appraisers. This regulatory framework ensures that appraisals are conducted by qualified professionals, maintaining integrity and compliance within the real estate market. Therefore, option D accurately reflects the legal limitations placed on real estate brokers regarding property appraisals.

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