Difficulty: Medium

Average Score: 67%

When can a real estate licensee prepare an appraisal for a lender?

Rationale

When the licensee holds an appraiser license.

A real estate licensee can only prepare an appraisal for a lender when they possess the necessary appraiser license, ensuring they meet the regulatory requirements and standards for conducting appraisals. This licensure confirms the individual has received proper training and has the necessary expertise to provide a reliable assessment of property value.

A (If the appraisal is identified as a comparative market analysis) YOUR ANSWER

A comparative market analysis (CMA) is distinctly different from an appraisal. While a CMA provides an estimate of property value based on recent sales of similar properties, it does not meet the rigorous standards required for formal appraisals. Therefore, labeling an appraisal as a CMA does not qualify a real estate licensee to prepare it for a lender.

B (As long as the appraisal is done before an offer to purchase is accepted by the seller) YOUR ANSWER

The timing of the appraisal relative to an offer to purchase does not change the legal requirements for who can conduct an appraisal. A real estate licensee must still hold an appraiser license regardless of when the appraisal is performed. Conducting an appraisal without the requisite license is not permissible, regardless of the transaction stage.

C (With proper disclosure to the lender about the licensee's qualifications) YOUR ANSWER

While disclosing qualifications is important, it does not substitute for the required licensure. A real estate licensee must hold a valid appraiser license to conduct appraisals for lenders, and simply informing them of qualifications does not grant the legal authority to perform such tasks.

Conclusion

In summary, a real estate licensee must possess an appraiser license to prepare an appraisal for a lender. This requirement ensures that appraisals are conducted by qualified professionals who adhere to industry standards and regulations, safeguarding the integrity of property valuation in real estate transactions.

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