A client asks the appraiser to omit a known environmental condition from the report. Complying would:
Correct Answer
B) Produce a misleading report regardless of the client's wishes
Why this is correct: An appraisal report must not be misleading. Omitting a known environmental condition that affects value would make the report misleading to intended users, regardless of the client's request. This violates the USPAP Ethics Rule and the requirement for credible results. Why the other choices are wrong: "Be acceptable since environmental issues are outside scope" is wrong; if a condition is known and affects value, it is within the appraiser's scope to consider and report it. "Be acceptable if noted only in the workfile" is wrong because material information must be in the report, not hidden in the workfile. "Require only an extraordinary assumption to cure" is wrong; an extraordinary assumption presumes something uncertain, not a known fact. Exam tip: Never omit a known material fact to please a client; it creates a misleading report.
Why This Is the Correct Answer
Why this is correct: An appraisal report must not be misleading. Omitting a known environmental condition that affects value would make the report misleading to intended users, regardless of the client's request. This violates the USPAP Ethics Rule and the requirement for credible results. Why the other choices are wrong: "Be acceptable since environmental issues are outside scope" is wrong; if a condition is known and affects value, it is within the appraiser's scope to consider and report it. "Be acceptable if noted only in the workfile" is wrong because material information must be in the report, not hidden in the workfile. "Require only an extraordinary assumption to cure" is wrong; an extraordinary assumption presumes something uncertain, not a known fact. Exam tip: Never omit a known material fact to please a client; it creates a misleading report.
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
If an appraiser uses a hypothetical condition that the subject property is 10% larger than it actually is, this must be:
Under Standard 1, when developing a real property appraisal, an appraiser must:
An appraiser accepts an assignment to appraise a specialized industrial property but has never appraised this property type before. To comply with the Competency Rule, the appraiser:
According to the Scope of Work Rule, the scope of work must be appropriate to the:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
A lender emails: 'We need at least $450,000 to make this loan work — can you take the assignment?' Accepting on that basis is:
An appraiser is developing an opinion of market value for a 20-unit apartment building. The appraiser finds three comparable sales with the following information: Sale 1: 18 units, sold for $1,800,000; Sale 2: 22 units, sold for $2,200,000; Sale 3: 24 units, sold for $2,280,000. What is the average price per unit for these comparables?
In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
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