Uniform Standards of Professional Appraisal Practice (USPAP) Practice Exam

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What must be stated when an extraordinary assumption is used in an appraisal?

  1. It will not affect the results

  2. It may have affected the assignment results

  3. It is a mandatory assumption

  4. It is irrelevant to the appraisal process

The correct answer is: It may have affected the assignment results

When an extraordinary assumption is utilized in an appraisal, it is essential to acknowledge that it may have affected the assignment results. This acknowledgment is crucial because extraordinary assumptions are made when certain relevant facts about the property, market, or regulatory environment are uncertain or not known. By stating that it may have affected the assignment results, the appraiser recognizes the potential impact of that assumption on the valuation and the overall reliability of the appraisal. This disclosure is important for transparency and to ensure that users of the appraisal are aware of the limitations and uncertainties inherent in the assumptions made. An appraiser must clarify the implications of these assumptions in the context of the appraisal, allowing for a clearer understanding of the value conclusion provided within the report. This practice aligns with the ethical obligation to maintain integrity and clarity in the appraisal process.