Why must the exposure time opinion be consistent with the value opinion reported?
Correct Answer
C) The value assumes that exposure already occurred
Why this is correct: The market value definition assumes the property has been exposed on the open market for a reasonable time prior to the effective date. The exposure time opinion estimates that reasonable period. If the reported exposure time is unrealistically short, it contradicts the premise of the value opinion. Why the other choices are wrong: Client approval is not the link. Exposure time does not directly determine the cap rate. While lenders may review both, the core reason is internal consistency of the appraisal premise. Exam tip: Value assumes past exposure; exposure time estimates how long that should have been.
Why This Is the Correct Answer
Why this is correct: The market value definition assumes the property has been exposed on the open market for a reasonable time prior to the effective date. The exposure time opinion estimates that reasonable period. If the reported exposure time is unrealistically short, it contradicts the premise of the value opinion. Why the other choices are wrong: Client approval is not the link. Exposure time does not directly determine the cap rate. While lenders may review both, the core reason is internal consistency of the appraisal premise. Exam tip: Value assumes past exposure; exposure time estimates how long that should have been.
More USPAP Questions
Reconciliation of the approaches to value is best described as which activity?
Why should the reconciliation address the quantity of evidence as well as its quality?
How long must a report be retained compared with the workfile?
What distinguishes an appraisal review from an appraisal?
An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
What should the reconciliation section explain to the reader?
How do the content obligations of the two report options differ with respect to the information analyzed?
The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
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