An appraiser relies on a survey provided for the assignment but has not independently surveyed the site. What determines whether an extraordinary assumption is involved?
Correct Answer
D) Whether uncertain site facts could alter the conclusions if false
A supplied-survey reliance statement alone does not establish either an extraordinary assumption or a hypothetical condition. Assess relevant evidence, uncertainty as of the effective date and the possible effect on conclusions. When an extraordinary assumption is used, meet its reasonable-basis, credible-analysis and disclosure requirements. Describe actual reliance and do not ignore contradictory boundary evidence; an appraiser does not become a licensed surveyor merely by using survey data.
Why This Is the Correct Answer
Option D is correct because USPAP defines an extraordinary assumption as an assignment-specific assumption about uncertain information which, if found to be false, could alter the appraiser's opinions or conclusions. Whether one is involved depends on whether uncertain site facts from the survey could change the conclusions if wrong.
Why the Other Options Are Wrong
Option A: A supplied survey creates a hypothetical condition by default
Option A is wrong because a supplied survey does not create a hypothetical condition by default. A hypothetical condition assumes something known to be contrary to fact, which relying on a survey does not do.
Option B: A reliance statement creates a jurisdictional exception by default
Option B is wrong because a reliance statement does not create a jurisdictional exception by default. A jurisdictional exception applies when law or regulation precludes compliance with part of USPAP, which is unrelated here.
Option C: The fee the surveyor charged alone determines the classification
Option C is wrong because the fee the surveyor charged has no bearing on whether an extraordinary assumption is involved. Classification depends on uncertainty and its possible effect on conclusions.
Uncertain and could change it
Ask two questions: is the fact uncertain, and could it change my conclusion if false? Two yeses point to an extraordinary assumption.
How to use: Use this to decide whether reliance on supplied information is an extraordinary assumption.
Exam Tip
Distinguish uncertain facts from facts known to be false, which point to a hypothetical condition.
Common Mistakes to Avoid
- -Calling reliance on a survey a hypothetical condition
- -Confusing extraordinary assumptions with jurisdictional exceptions
- -Ignoring conflicting boundary evidence
Concept Deep Dive
Analysis
This question tests the definition of an extraordinary assumption. The key test is whether uncertain information used in the analysis could alter the appraiser's opinions or conclusions if found to be false.
Background Knowledge
Extraordinary assumptions deal with uncertain facts that are presumed true, while hypothetical conditions are contrary to known fact. Using an extraordinary assumption requires a reasonable basis, credible analysis and disclosure.
Real-World Application
An appraiser relies on a seller-supplied survey showing a lot size larger than county records. The appraiser uses an extraordinary assumption that the survey is accurate, explains that the value could change if it is not, and notes the conflicting record.
More USPAP Questions
In a cost approach for an improved property, an appraiser estimates site value by sales comparison, allocation and extraction, then settles on one site-value figure before final reconciliation. How is this step best described?
An extraordinary assumption was reasonably supported, properly used and disclosed in an appraisal report. Later, the assumed information is found to be false. Which conclusion is best supported?
An otherwise applicable valuation approach cannot be developed reliably from the available data. The remaining scope can produce credible assignment results. What should the appraiser do?
May an appraiser use a hypothetical condition in any assignment?
An appraisal has a current effective date and permits an extraordinary assumption if its requirements are met. Which situation involves uncertain information rather than a fact known to be contrary to reality on that date?
Why must a report identify any real property interest that is being excluded from the value opinion?
Which review best helps explain divergent cost, sales-comparison and income indications?
Two value indications are $340,000 and $392,000. What is the difference as a percentage of the lower indication, rounded to one decimal place?
An unauthorized third party requests a lender-client’s report. No due-process or other permitted disclosure exception applies. How should the appraiser respond?
An appraiser proposes to assume there are no hidden defects. Which fact would characterize that assumption as extraordinary under the USPAP 2024 definition, rather than justify dismissing it as routine boilerplate?
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