An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
Correct Answer
D) A breach of the obligation to remain impartial
A client’s preferred result is not a basis for selecting the top of an indicated range. The appraiser must remain independent, impartial and objective and explain an evidence-supported conclusion. A figure is not justified merely because it lies within a range.
Why This Is the Correct Answer
Option D is correct because USPAP defines an appraiser as one expected to perform valuation services in a manner that is independent, impartial and objective. An appraiser must not advocate the cause or interest of any party. Selecting the top of the range because the client needs that figure puts the client's interest ahead of the evidence.
Why the Other Options Are Wrong
Option A: An acceptable exercise of appraiser judgment
Option A calls this an acceptable exercise of judgment, but judgment must rest on evidence. Selecting a figure because the client needs it is not judgment about value at all.
Option B: A permissible response to a client instruction
Option B calls it a permissible response to a client instruction, but a client cannot direct the value conclusion. Following such a request is advocacy, which the appraiser must avoid.
Option C: A scope of work decision properly documented
Option C calls it a properly documented scope of work decision, but scope of work concerns the type and extent of research and analysis, not the value result. Documenting a client-driven figure does not make it acceptable.
Evidence picks, not the client
The evidence picks the point in the range; the client's needs do not.
How to use: Use this when a question describes a conclusion chosen to meet a client's goal.
Exam Tip
When a stem says the figure was chosen because the client needed it, look for the answer about impartiality, even if the figure lies within the range.
Common Mistakes to Avoid
- -Thinking any figure within the range is defensible
- -Treating a client's needed value as a scope of work matter
- -Believing documentation cures a client-driven conclusion
Concept Deep Dive
Analysis
This question tests appraiser independence during reconciliation. Choosing a point because the client needs it lets the client's goal, not the evidence, decide the conclusion. That is advocacy, and it breaches the duty to be independent, impartial and objective.
Background Knowledge
USPAP requires appraisers to act independently, impartially and objectively and not to advocate for any party. A value conclusion must follow the evidence and analysis. A figure being inside the indicated range does not justify it if the reason for choosing it is the client's need.
Real-World Application
A loan officer tells an appraiser the deal needs $610,000 to close. The supported indications point to about $595,000. The appraiser reports $595,000 with her reasoning, because moving to $610,000 to meet the deal would be advocacy.
More Reconciliation 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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