After reconciliation the appraiser concludes at $612,437. What is the most appropriate final step?
Correct Answer
B) Round it to reflect the precision of the data
Why this is correct: The precision of a final value opinion should reflect the precision of the underlying market data and adjustments. Reporting a figure like $612,437 implies a level of exactness that appraisal methods cannot support. Rounding (e.g., to $612,000) more accurately communicates the reliability of the estimate. Why the other choices are wrong: Reporting the figure exactly as computed misrepresents the precision of the analysis. Adjusting it to match a contract price would improperly substitute market evidence for the appraiser's independent judgment. Adding a contingency allowance is not a standard step in reconciliation and would bias the value. Exam tip: Your final value opinion's precision should match the 'fuzziness' of your data. Round to the most significant digit supported by your analysis.
Why This Is the Correct Answer
Why this is correct: The precision of a final value opinion should reflect the precision of the underlying market data and adjustments. Reporting a figure like $612,437 implies a level of exactness that appraisal methods cannot support. Rounding (e.g., to $612,000) more accurately communicates the reliability of the estimate. Why the other choices are wrong: Reporting the figure exactly as computed misrepresents the precision of the analysis. Adjusting it to match a contract price would improperly substitute market evidence for the appraiser's independent judgment. Adding a contingency allowance is not a standard step in reconciliation and would bias the value. Exam tip: Your final value opinion's precision should match the 'fuzziness' of your data. Round to the most significant digit supported by your analysis.
More reconciliation Questions
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Which of the following is a written report option named in the current edition of USPAP?
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