An appraiser may use an extraordinary assumption only when:
Correct Answer
C) It is required for credible results and disclosure is made
Why this is correct: USPAP allows an extraordinary assumption only when it is necessary for credible assignment results, is reasonable, and is clearly disclosed in the report. It is used when specific information is unknown but can be assumed for analysis. Why the other choices are wrong: 'Verification would take more than one day' is not a valid justification; convenience does not warrant an assumption. 'The client requests it in writing' does not alone make it professionally acceptable. 'The assumption favors the client's position' is unethical and violates USPAP's impartiality requirement. Exam tip: An extraordinary assumption is for unknown facts; a hypothetical condition is for contrary-to-fact conditions.
Why This Is the Correct Answer
Why this is correct: USPAP allows an extraordinary assumption only when it is necessary for credible assignment results, is reasonable, and is clearly disclosed in the report. It is used when specific information is unknown but can be assumed for analysis. Why the other choices are wrong: 'Verification would take more than one day' is not a valid justification; convenience does not warrant an assumption. 'The client requests it in writing' does not alone make it professionally acceptable. 'The assumption favors the client's position' is unethical and violates USPAP's impartiality requirement. Exam tip: An extraordinary assumption is for unknown facts; a hypothetical condition is for contrary-to-fact conditions.
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:
People Also Study
Valuation Principles & Procedures
25% of exam
Property Description & Analysis
20% of exam
Market Analysis & Highest/Best Use
15% of exam
Appraisal Math & Statistics
15% of exam
Report Writing & Compliance
10% of exam