An extraordinary assumption must be disclosed when:
Correct Answer
C) The appraiser believes it might affect the assignment results
Why this is correct: USPAP requires disclosure of an extraordinary assumption when it concerns uncertain information that, if found to be false, could alter the appraiser's opinions or conclusions. The appraiser must judge its potential impact. Why the other choices are wrong: Client requirement alone does not dictate disclosure; the nature of the assumption does. Complex property types might involve more assumptions but don't automatically require this disclosure. Limited market data might lead to a hypothetical condition, not necessarily an extraordinary assumption. Exam tip: Disclose an extraordinary assumption if uncertain facts could change your value conclusion.
Why This Is the Correct Answer
Option A is correct because USPAP Standards Rule 1-4(h) specifically states that extraordinary assumptions must be disclosed when the appraiser believes the uncertain information might affect the assignment results. The key trigger is the appraiser's professional judgment that the assumption could impact the credibility of the results if proven false. This requirement ensures transparency and allows users of the appraisal to understand potential limitations in the analysis. The disclosure is mandatory when this condition is met, regardless of other circumstances.
Why the Other Options Are Wrong
Concept Deep Dive
Analysis
An extraordinary assumption is a supposition regarding uncertain information used in an assignment that, if found to be false, could alter the appraiser's opinions or conclusions. The USPAP requires disclosure of extraordinary assumptions specifically when the appraiser believes the uncertain information might affect the assignment results. This is a critical concept because it relates to the credibility and reliability of the appraisal report. The disclosure requirement is triggered by the appraiser's professional judgment about potential impact, not by external factors like client requests or property complexity.
More USPAP Questions
Which statement best defines a hypothetical condition under USPAP?
According to the Competency Rule, if an appraiser lacks the knowledge and experience to complete an assignment competently, which action is NOT acceptable?
An appraiser runs only the sales comparison approach on a standard tract home and omits the cost and income approaches. Under Standard 1 this is:
A value opinion for a subdivision as if fully built out two years from now is what kind of assignment, and what does it require?
A hypothetical condition differs from an extraordinary assumption in that a hypothetical condition:
An appraiser must disclose in the certification whether they have:
A client-imposed requirement — 'use only comps from our approved list' — is best described as:
Under Standard 1, when developing a real property appraisal, an appraiser must:
The certification required by Standards Rule 2-3 must be signed by:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
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