What is the effect of an extraordinary assumption on the credibility of assignment results?
Correct Answer
B) It requires a reasonable basis and appropriate disclosure; credibility still must be assessed
An extraordinary assumption is not a guarantee. Its use requires a reasonable basis and clear disclosure; the appraiser must still develop credible results under the assignment conditions.
Why This Is the Correct Answer
An extraordinary assumption is not a guarantee. Its use requires a reasonable basis and clear disclosure; the appraiser must still develop credible results under the assignment conditions.
More USPAP 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?
An extraordinary assumption was reasonably supported, properly used and disclosed in an appraisal report. Later, the assumed information is found to be false. Which conclusion is best supported?
An otherwise applicable valuation approach cannot be developed reliably from the available data. The remaining scope can produce credible assignment results. What should the appraiser do?
May an appraiser use a hypothetical condition in any assignment?
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?
Why must a report identify any real property interest that is being excluded from the value opinion?
Which review best helps explain divergent cost, sales-comparison and income indications?
Two value indications are $340,000 and $392,000. What is the difference as a percentage of the lower indication, rounded to one decimal place?
An unauthorized third party requests a lender-client’s report. No due-process or other permitted disclosure exception applies. How should the appraiser respond?
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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Previous Question
For an older house, verified current sales support $430,000 while cost indicates $520,000. Current cost-new and site-value inputs have been verified. Which remaining cost input should be examined for possible overstatement of the indication?
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Comparable-sales evidence is limited. What should guide reconciliation with other applicable approaches?