What does it mean to say a value conclusion is credible?
Correct Answer
D) That it is worthy of belief given the evidence
A credible conclusion is worthy of belief in the context of its intended use and supporting evidence. Falling between several numerical indications does not establish credibility by itself. The data, applicable methods and reasoning must support the reported result.
Why This Is the Correct Answer
Option D is correct because USPAP defines credible as worthy of belief. Credible assignment results require support, by relevant evidence and logic, to the degree necessary for the intended use. A conclusion is credible when the data, methods and reasoning support it.
Why the Other Options Are Wrong
Option A: That it matches the contract price for the property
Option A, matching the contract price, does not make a conclusion credible. A value opinion can differ from a contract price, and agreement with the price alone shows no supporting evidence.
Option B: That it falls within the range of the indications
Option B, falling within the range of the indications, does not by itself establish credibility. A figure inside the range still needs evidence and reasoning to support why that point was chosen.
Option C: That the client has accepted it without objection
Option C, client acceptance without objection, reflects the client's reaction, not the support behind the conclusion. Credibility depends on evidence and logic, not on whether the client is satisfied.
Credible means believable with proof
Credible means worthy of belief because evidence and logic support it for the intended use.
How to use: Use this to test each answer choice: does it rest on evidence and reasoning, or on agreement with someone or something?
Exam Tip
Choose the answer tied to support by evidence and logic; answers based on a contract, a range or client approval describe something else.
Common Mistakes to Avoid
- -Equating credibility with matching the sale price
- -Assuming any figure inside the range is credible
- -Treating client approval as proof of credibility
Concept Deep Dive
Analysis
This question tests the meaning of credible in appraisal practice. USPAP defines credible as worthy of belief, and credible results require support by relevant evidence and logic for the intended use. Agreement with a contract, a range or a client does not make a result credible.
Background Knowledge
USPAP uses credibility as the test for assignment results. Results are credible when they are supported by relevant evidence and logic to the degree necessary for the intended use. The level of support required depends on the assignment's intended use.
Real-World Application
An appraiser's conclusion matches the contract price exactly, and the lender questions it. The appraiser shows that four close, recent sales and a supported cost approach back the figure. The conclusion is credible because of that support, not because it matches the contract.
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?
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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?
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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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