The lowest-gross-adjustment sale is also verified as the strongest competitive evidence after full analysis. May its indication support the conclusion?
Correct Answer
C) Yes, if reconciliation explains that supported reliance and considers the other evidence.
A final opinion may follow one indication if the full analysis establishes it is best supported and treats the other evidence appropriately. Lowest gross adjustment alone is not decisive; neither simple averaging nor the median is mandatory. Explain support rather than claiming averaging necessarily dilutes evidence.
Why This Is the Correct Answer
Option C is correct because the sale is both the lowest-gross-adjustment sale and verified as the strongest competitive evidence after full analysis. Most reliance is typically placed on sales requiring the fewest or smallest adjustments, and reconciliation may rely on such a sale when that reliance is explained and the other evidence is considered.
Why the Other Options Are Wrong
Option A: No, because the conclusion must be the simple mean of the indications.
Option A says the conclusion must be the simple mean of the indications. Reconciliation is a reasoned weighing of evidence, and no rule requires a simple average.
Option B: No, because the median of the adjusted indications controls.
Option B says the median of the adjusted indications controls. Like the mean, the median is not mandatory; the appraiser weighs the quality of each indication.
Option D: Yes, because its gross adjustment is the smallest, without weighing the rest of the file.
Option D relies on the sale only because its gross adjustment is the smallest, without weighing the rest of the file. Lowest gross adjustment alone is not decisive; the conclusion must reflect the full analysis and consideration of the other evidence.
Weigh, Don't Average
Reconciliation weighs the quality of the evidence and explains the reasons; it is not a mean, a median or a single number rule.
How to use: Use this when answer choices offer a mechanical formula for the final value indication.
Exam Tip
Prefer answers that tie reliance to supported analysis and explanation over answers that rely on one metric or a fixed formula.
Common Mistakes to Avoid
- -Averaging adjusted prices without considering comparable quality
- -Treating the median as a required conclusion
- -Choosing a sale only for its lowest gross adjustment without further analysis
Concept Deep Dive
Analysis
This question tests reconciliation within the sales comparison approach. A final opinion may rest mainly on one indication if the full analysis shows it is the best supported, as long as the appraiser explains that reliance and considers the other evidence. No mechanical rule such as the mean or median controls.
Background Knowledge
In reconciliation, the appraiser evaluates the reliability and relevance of each adjusted indication, giving most weight to the best comparables. Fewer and smaller adjustments often signal greater similarity, but that measure is one consideration within a full analysis, not a substitute for it.
Real-World Application
Of four adjusted comparables, one is a recent sale on the same street with minimal adjustments that verification confirms was arm's length. The appraiser places most weight on it, explains why in the reconciliation, and notes how the other sales bracket and support the result.
More Sales Comparison Questions
Which stated cause of supported value loss is external?
Improvement cost new is $450,000. Separately supported improvement depreciation deductions of $45,000, $25,000, $15,000 are expressly nonoverlapping and not already excluded from cost new. Add supported site value of $125,000, already reflecting any site losses. What total indicated value results?
Which two depreciation categories may each be classified as curable or incurable by comparing the cost to remedy a deficiency with the value gained?
Improvement cost new is $800,000. Separately supported improvement depreciation deductions of $120,000, $80,000, $40,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
The principle of anticipation in real estate valuation states that:
Which highest-and-best-use criterion addresses whether a proposed use is allowed by zoning and applicable legal restrictions?
Three comparables produce adjusted indications of $312,000, $309,000 and $315,000, requiring gross adjustments of 9%, 14% and 22% respectively. Verification also establishes that the first sale is the closest competitive substitute and its adjustments are better supported than the other two. Which indication deserves the most weight on those facts?
When reconciling value indications from the three approaches to value, an appraiser should:
A property sold at a cash-equivalent price of $1,062,500. Its stabilized annual NOI is $85,000. What is the indicated overall rate?
In reconciliation, an appraiser should:
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