The principle of change implies that a value opinion is:
Correct Answer
A) Valid as of a specific date rather than indefinitely
A value opinion applies as of its specified effective date under the identified assignment conditions. Market and property changes can affect a later opinion. Report delivery does not make value permanent or apply the result automatically to another property.
Why This Is the Correct Answer
Option A is correct because an opinion of value is valid as of the specified date of the appraisal. Since markets and properties change over time, a later date may produce a different value, so an opinion is tied to its effective date rather than lasting indefinitely.
Why the Other Options Are Wrong
Option B: Permanent once the report has been delivered to the client
Option B says the value becomes permanent once the report is delivered. Delivery does not freeze value; market and property changes after the effective date can affect a later opinion.
Option C: Applicable to any similar property
Option C says the opinion applies to any similar property. A value opinion is developed for a specific property under the identified assignment conditions and does not carry over to another property.
Option D: Independent of market conditions
Option D says the opinion is independent of market conditions. Value reflects market conditions as of the effective date, which is exactly why the principle of change ties it to a date.
Value is a snapshot
An appraisal is a photograph of value on one day, not a live video of each day after.
How to use: Use this image to pick the answer that ties value to its effective date.
Exam Tip
Look for wording that links the opinion to a specific effective date; answers implying permanence conflict with the principle of change.
Common Mistakes to Avoid
- -Treating a delivered appraisal as a permanent value
- -Applying one property's value to a similar property
- -Ignoring the effective date when reading a value opinion
Concept Deep Dive
Analysis
This question tests the principle of change and its link to the effective date. Because market forces and property conditions change constantly, a value opinion applies only as of a specific date. Options suggesting permanence or universal applicability conflict with that idea.
Background Knowledge
The principle of change recognizes that economic, social, governmental and physical forces continually affect property value. Appraisals therefore state an effective date, and retrospective or prospective values use different dates for different purposes.
Real-World Application
A borrower asks to reuse an appraisal from a year ago for a new loan. The lender explains that the value opinion applied as of the earlier effective date and that market changes since then require a current analysis.
More Market Questions
In market area analysis, what characteristic distinguishes a district from a neighborhood?
Under USPAP Standards Rule 1-3(a), which item must an appraiser identify and analyze when necessary for credible results in a market value assignment?
How does the Fannie Mae Selling Guide define a neighborhood?
Several homes in a neighborhood are vacant and boarded up. Which market force does Fannie Mae classify this as?
Infrastructure investment such as a new interchange typically affects nearby land by:
A city raises property tax rates and tightens building regulations. Which market force does Fannie Mae classify these as?
An appraiser believes, without market evidence, that a nearby group home lowers values. What does Fannie Mae require?
Which three categories are used to report the supply of properties in a Fannie Mae neighborhood section?
An appraiser is asked for a retrospective value opinion as of three years ago. When must the appraiser meet the Competency Rule?
Can mixed land uses in a residential neighborhood ever enhance home values, according to Fannie Mae?
People Also Study
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam