An appraiser discovers that a property has environmental contamination after completing the inspection but before finalizing the report. The contamination was not apparent during the inspection. What should the appraiser do?
Correct Answer
B) Include the information and consider its impact on value
Investigate the newly learned contamination and its relevance to the property and effective-date conditions. Reconsider necessary scope and competence and analyze supported market effects before reporting. Discovery alone neither proves a discount nor requires restarting every step, and a later event should not silently change the effective date.
Why This Is the Correct Answer
Option B is correct because the appraiser must collect, verify and analyze all information necessary for credible assignment results, and newly discovered conditions can require reconsidering the scope of work. The appraiser should investigate the contamination, consider competency and scope, and analyze any supported market effect on value. Discovery alone does not prove a specific discount, so the effect must be analyzed rather than assumed.
Why the Other Options Are Wrong
Option A: Start the entire appraisal process over from the beginning
Option A is wrong because starting the entire appraisal process over from the beginning is not required. The appraiser reconsiders the scope as needed and analyzes the new information, but valid prior work does not have to be discarded.
Option C: Note it in the report but state it doesn't affect value
Option C is wrong because noting the contamination while declaring it doesn't affect value prejudges the outcome without analysis. Any conclusion about its effect must come from supported market analysis.
Option D: Ignore the information since the inspection was already completed
Option D is wrong because ignoring the information since the inspection was already completed would leave out relevant data needed for credible results. The duty to analyze necessary information continues until the report is finalized.
New fact, new look
When a new material fact appears mid-assignment, take a new look at scope and value effects before signing.
How to use: Use this when a question describes something learned after inspection but before the report is final.
Exam Tip
Prefer answers that analyze newly discovered information over answers that ignore it, prejudge its effect or demand a full restart.
Common Mistakes to Avoid
- -Assuming the inspection date ends the duty to consider new information
- -Stating the condition has no value effect without analysis
- -Believing the whole assignment must be redone from scratch
Concept Deep Dive
Analysis
This question tests how an appraiser responds to information discovered during an assignment. USPAP requires collecting and analyzing all information necessary for credible results, and new conditions may cause the appraiser to reconsider the scope of work. The right response is to include and analyze the information, not ignore it, prejudge it or restart blindly.
Background Knowledge
The scope of work is not fixed at engagement; information discovered during an assignment can change what research and analysis are needed. Environmental contamination can affect marketability and value, but the size of any effect requires market support. The appraiser must also consider whether the competency needed has changed.
Real-World Application
After inspecting a former gas station site, an appraiser finds public records showing leaking storage tanks. The appraiser researches the condition, considers whether specialist input is needed, and analyzes market evidence on how such contamination affects value before completing the report.
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