A tax authority has a mass-appraisal assessment for the subject. A client commissions a separate single-property market-value appraisal. Which statement is correct?
Correct Answer
A) The mass result may be relevant but cannot by itself meet the new assignment’s needs.
Mass appraisal and single-property appraisal have different development and reporting frameworks and scopes. A tax assessment may be information to investigate in the new assignment, but its existence does not automatically produce the value opinion and report required by that client. Nor does a tax purpose mean mass appraisal is inherently outside USPAP; Standards 5 and 6 address that discipline.
Why This Is the Correct Answer
Option A is correct because a mass-appraisal assessment may be relevant information to investigate, but it does not automatically produce the value opinion and report the new client requires. Mass appraisal and single-property appraisal have different development and reporting frameworks and scopes, and the appraiser must collect, verify and analyze all information necessary for credible results.
Why the Other Options Are Wrong
Option B: A matching recent sale price lets the assessment serve as the new client’s own report.
Option B is wrong because a matching recent sale price does not let the assessment serve as the new client's own report. The new assignment must be developed and reported under its own requirements regardless of whether the figures agree.
Option C: Mass appraisal is outside USPAP because its purpose is property taxation.
Option C is wrong because a property-tax purpose does not place mass appraisal outside USPAP. USPAP Standards 5 and 6 address mass appraisal.
Option D: A mass appraisal is an appraisal review of each parcel in the universe.
Option D is wrong because a mass appraisal is a valuation of a universe of properties using standard methodology and common data, not an appraisal review of each parcel in that universe. Appraisal review is a different activity.
Many parcels, one standard set
Mass appraisal values many properties under Standards 5 and 6; a single-property appraisal follows Standards 1 and 2. One does not stand in for the other.
How to use: Use this when a question asks whether a tax assessment can replace a single-property appraisal.
Exam Tip
Watch for answers that let an assessment or a matching price stand in for the new assignment's own work. The correct answer treats the assessment as relevant information without letting it replace the new assignment.
Common Mistakes to Avoid
- -Using an assessed value as the market value opinion without independent analysis
- -Believing tax-purpose mass appraisal is outside USPAP
- -Confusing mass appraisal with appraisal review
Concept Deep Dive
Analysis
This question tests the difference between mass appraisal and a single-property appraisal. A tax assessment may be relevant information, but a new single-property assignment has its own development and reporting requirements. Recognize that both disciplines fall under USPAP, with different standards.
Background Knowledge
USPAP defines mass appraisal as valuing a universe of properties as of a given date using standard methodology, common data and statistical testing. Single-property real property appraisals are developed and reported under Standards 1 and 2, while mass appraisal is addressed in Standards 5 and 6.
Real-World Application
A client hires an appraiser to value a home for an estate. The county assessed value is close to a recent listing price, but the appraiser treats the assessment as one piece of information and develops a full sales comparison analysis for the estate's intended use.
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