When market value is the objective, what related opinion must be developed alongside it?
Correct Answer
D) An opinion of reasonable exposure time linked to the value conclusion
Why this is correct: Market value definitions assume exposure to the market, so USPAP requires an opinion of reasonable exposure time—the marketing period presumed to have occurred prior to the effective date—linked to the value conclusion, as stated originally. Why the other choices are wrong: "A formally guaranteed minimum resale price that the lender can rely upon" is incorrect; appraisals do not guarantee future prices. "The property's assessed value for taxes" is unrelated to market value. "An insurance replacement cost estimate" is a different valuation purpose. Exam tip: Exposure time is retrospective and integral to market value.
Why This Is the Correct Answer
Why this is correct: Market value definitions assume exposure to the market, so USPAP requires an opinion of reasonable exposure time—the marketing period presumed to have occurred prior to the effective date—linked to the value conclusion, as stated originally. Why the other choices are wrong: "A formally guaranteed minimum resale price that the lender can rely upon" is incorrect; appraisals do not guarantee future prices. "The property's assessed value for taxes" is unrelated to market value. "An insurance replacement cost estimate" is a different valuation purpose. Exam tip: Exposure time is retrospective and integral to market value.
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
If an appraiser uses a hypothetical condition that the subject property is 10% larger than it actually is, this must be:
Under Standard 1, when developing a real property appraisal, an appraiser must:
An appraiser accepts an assignment to appraise a specialized industrial property but has never appraised this property type before. To comply with the Competency Rule, the appraiser:
According to the Scope of Work Rule, the scope of work must be appropriate to the:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
A lender emails: 'We need at least $450,000 to make this loan work — can you take the assignment?' Accepting on that basis is:
An appraiser is developing an opinion of market value for a 20-unit apartment building. The appraiser finds three comparable sales with the following information: Sale 1: 18 units, sold for $1,800,000; Sale 2: 22 units, sold for $2,200,000; Sale 3: 24 units, sold for $2,280,000. What is the average price per unit for these comparables?
In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
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