Humber/Ontario Real Estate Course 4 Exam Practice

Form report appraisals are often used in which context?

1. Are detailed, lengthy and complex.

2. Must be prepared using the Appraisal Institute of Canada form.

3. Must include all three approaches to value.

4. Are often used when completing an appraisal for mortgage purposes.

5. Require an on-site inspection.

6. Are rarely accepted by financial institutions.

The correct answer is: Are often used when completing an appraisal for mortgage purposes.

Form report appraisals are frequently used in the context of mortgage purposes due to their standardized format, which facilitates a more straightforward, efficient review process for lenders. When financial institutions require appraisals to determine the value of a property in relation to mortgage financing, they often prefer form reports because they provide essential information concisely and in a uniform manner. This helps streamline the underwriting process and ensures that the appraiser's findings meet the lender's requirements. In this scenario, the other options do not align as closely with the typical application of form report appraisals. For instance, form report appraisals may not need to be detailed or lengthy, as option A suggests. They also do not necessarily have to conform to the Appraisal Institute of Canada form, nor do they always require all three approaches to value, as noted in options B and C. Additionally, while an on-site inspection is a common practice in appraisal, it is not a specific requirement for form report appraisals exclusive to mortgage contexts. Lastly, these appraisals are often accepted by financial institutions, contradicting the premise of the final option.