An appraiser documents a market-conditions adjustment with one sentence: 'the market is rising, so 4% was applied.' A reviewer's objection would be:
Correct Answer
D) The rate lacks shown support — no paired data, resales or trend analysis cited
Why this is correct: USPAP and reporting standards require appraisers to support their adjustments with market evidence. The statement 'the market is rising, so 4% was applied' is an unsupported conclusion. Proper support includes citing paired sales, resale analysis, or documented market trend data. Why the other choices are wrong: 'Four percent is always too high' is wrong because the rate itself may be correct; the error is the lack of support. 'The direction chosen for the market-conditions adjustment is wrong for this market' is wrong because the reviewer's objection is to the lack of support, not necessarily the direction. 'Rising markets need no adjustments' is wrong because market conditions often require adjustments to reconcile sale dates. Exam tip: Any adjustment in the sales comparison approach must be derived from and supported by market data.
Why This Is the Correct Answer
Why this is correct: USPAP and reporting standards require appraisers to support their adjustments with market evidence. The statement 'the market is rising, so 4% was applied' is an unsupported conclusion. Proper support includes citing paired sales, resale analysis, or documented market trend data. Why the other choices are wrong: 'Four percent is always too high' is wrong because the rate itself may be correct; the error is the lack of support. 'The direction chosen for the market-conditions adjustment is wrong for this market' is wrong because the reviewer's objection is to the lack of support, not necessarily the direction. 'Rising markets need no adjustments' is wrong because market conditions often require adjustments to reconcile sale dates. Exam tip: Any adjustment in the sales comparison approach must be derived from and supported by market data.
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