An appraiser cannot access a crawl space but assumes, based on the era and visible framing, that the foundation is sound. In USPAP terms this is:
Correct Answer
B) An extraordinary assumption — uncertain, but believed reasonable
Why this is correct: An extraordinary assumption is used when information is uncertain but is assumed to be true for the purpose of analysis. Assuming the foundation is sound without inspection fits this definition. It must be disclosed, and the report must state that value could change if the assumption is false. Why the other choices are wrong: It is not a hypothetical condition because the foundation's state is unknown, not known to be false. It is not an ordinary limiting condition of no consequence; it's a significant assumption. It is not automatically a competency violation if properly disclosed. Exam tip: If it's unknown but you assume it's true, it's an extraordinary assumption. Disclose it.
Why This Is the Correct Answer
Why this is correct: An extraordinary assumption is used when information is uncertain but is assumed to be true for the purpose of analysis. Assuming the foundation is sound without inspection fits this definition. It must be disclosed, and the report must state that value could change if the assumption is false. Why the other choices are wrong: It is not a hypothetical condition because the foundation's state is unknown, not known to be false. It is not an ordinary limiting condition of no consequence; it's a significant assumption. It is not automatically a competency violation if properly disclosed. Exam tip: If it's unknown but you assume it's true, it's an extraordinary assumption. Disclose it.
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:
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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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