An assignment requires valuing a property as though a proposed rezoning had been granted. What is required for this to be acceptable?
Correct Answer
C) Its use must be disclosed and results still credible
Why this is correct: This is a hypothetical condition (assuming a fact contrary to what is known). USPAP permits its use if it is: 1) required for a legitimate purpose, 2) disclosed clearly, and 3) the resulting appraisal is still credible for the intended use. Why the other choices are wrong: The rezoning need not be certain; certainty would make it a fact, not a hypothetical. Client indemnification does not make the appraisal credible or compliant. A second opinion under existing zoning is not mandatory. Exam tip: For a hypothetical condition, focus on disclosure, legitimate purpose, and credibility of the result.
Why This Is the Correct Answer
Why this is correct: This is a hypothetical condition (assuming a fact contrary to what is known). USPAP permits its use if it is: 1) required for a legitimate purpose, 2) disclosed clearly, and 3) the resulting appraisal is still credible for the intended use. Why the other choices are wrong: The rezoning need not be certain; certainty would make it a fact, not a hypothetical. Client indemnification does not make the appraisal credible or compliant. A second opinion under existing zoning is not mandatory. Exam tip: For a hypothetical condition, focus on disclosure, legitimate purpose, and credibility of the result.
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An appraiser is told the property has no environmental contamination and cannot verify it. How should this be handled?
Reconciliation of the approaches to value is best described as which activity?
Significant appraisal assistance from a person who does not sign the report must be treated how?
In appraising a hotel as a going concern, what must be allocated?
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Which of the following is a written report option named in the current edition of USPAP?
What distinguishes qualitative from quantitative analysis in the sales comparison approach?
Why should the reconciliation address the quantity of evidence as well as its quality?
An appraisal report includes an addendum explaining the adjustment derivation. How does this affect compliance?
An extraordinary assumption proves false after the report is delivered. What follows?
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