A client-imposed requirement — 'use only comps from our approved list' — is best described as:
Correct Answer
C) An assignment condition to be tested against the credibility floor before acceptance
Why this is correct: Any client requirement is an assignment condition that must be evaluated against the credibility floor; if it precludes credible results, it cannot be accepted, as per the original explanation. Why the other choices are wrong: "A perfectly normal engagement term that the appraiser simply follows as written" is incorrect; the appraiser must assess its impact on credibility. "A jurisdictional exception to the standards" is false; client requirements do not override USPAP. "A hypothetical condition requiring disclosure" is wrong; it's an assignment condition, not a hypothetical. Exam tip: Test all client-imposed conditions against the credibility standard.
Why This Is the Correct Answer
A client-imposed restriction on comparables is an assignment condition, and USPAP requires the appraiser to test whether accepting it still permits credible results before agreeing to it.
Why the Other Options Are Wrong
Option A: A perfectly normal engagement term that the appraiser simply follows as written
Client terms are not automatically acceptable. An assignment condition that prevents credible results must be declined or renegotiated.
Option B: A jurisdictional exception to the standards
A jurisdictional exception arises where law or regulation precludes compliance with part of USPAP. A client instruction is not law.
Option D: A hypothetical condition requiring disclosure
A hypothetical condition is contrary to a known fact about the property or market. A restriction on data sources is not one.
Test It Before You Take It
Test It Before You Take It. Client terms are proposals, not instructions you must follow.
How to use: Ask whether you can still reach a credible result. If not, negotiate or decline — disclosure will not fix it.
Exam Tip
Distinguish assignment conditions from extraordinary assumptions, hypothetical conditions and jurisdictional exceptions. Each has a distinct definition and treatment.
Common Mistakes to Avoid
- -Treating client instructions as automatically binding
- -Curing an unacceptable condition through disclosure
- -Confusing the condition with a jurisdictional exception
Concept Deep Dive
Analysis
A client may set the terms of an engagement, but not all terms are acceptable, and USPAP supplies the test. An instruction to use only comparables from an approved list is an assignment condition, and every assignment condition must be measured against the credibility floor: does accepting it still allow the appraiser to produce results that are credible for the intended use, and does it avoid making the assignment misleading? Sometimes the answer is yes — a restricted pool may still contain genuinely comparable sales. Often it is no, because the pool excludes the most similar sales or is constructed to steer the conclusion. What matters is that the appraiser tests the condition before accepting rather than treating client instructions as automatically binding. If the condition cannot be satisfied credibly, the appraiser must decline the assignment or negotiate different terms; it cannot be cured by disclosure alone.
Background Knowledge
USPAP requires assignment conditions to be tested against whether credible assignment results can still be produced. Conditions preventing credible results must be declined, and disclosure alone does not cure them.
Real-World Application
An appraiser given an approved comparables list reviews it, finds it omits the closest sales, and declines the assignment on those terms.
More USPAP Questions
Which statement best defines a hypothetical condition under USPAP?
According to the Competency Rule, if an appraiser lacks the knowledge and experience to complete an assignment competently, which action is NOT acceptable?
An appraiser runs only the sales comparison approach on a standard tract home and omits the cost and income approaches. Under Standard 1 this is:
A value opinion for a subdivision as if fully built out two years from now is what kind of assignment, and what does it require?
A hypothetical condition differs from an extraordinary assumption in that a hypothetical condition:
An appraiser must disclose in the certification whether they have:
Under Standard 1, when developing a real property appraisal, an appraiser must:
The certification required by Standards Rule 2-3 must be signed by:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
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?
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