An appraiser finds one pair supporting a $12,000 adjustment and another supporting $19,000 for the same feature. The next step is:
Correct Answer
C) Investigate whether the pairs differ in another respect
Why this is correct: The original explanation states that a wide spread between paired-data adjustments usually indicates one pair includes a second, unaccounted-for difference. The correct next step, 'Investigate whether the pairs differ in another respect,' follows the core appraisal principle that adjustments must be extracted from comparable sales that are identical except for the one feature being measured. Investigating reveals if the discrepancy is due to a hidden variable, allowing the appraiser to reconcile the figures or properly discard a flawed pair. Why the other choices are wrong: 'Use the larger figure for conservatism' is wrong because arbitrarily selecting a larger adjustment without a market-derived reason violates the principle of extracting supportable adjustments from the data. 'Average them and apply $15,500' is wrong because mechanically averaging two divergent figures without understanding the cause obscures the true market adjustment and is not a supported analytical technique. 'Abandon the adjustment entirely as being unsupportable' is wrong because a discrepancy does not automatically invalidate the feature's adjustment; the proper step is to investigate first, as a valid adjustment may still be extractable. Exam tip: In paired-data questions, a large spread is a red flag for a hidden difference, not a signal to average or guess. Your next step is always to investigate.
Why This Is the Correct Answer
Why this is correct: The original explanation states that a wide spread between paired-data adjustments usually indicates one pair includes a second, unaccounted-for difference. The correct next step, 'Investigate whether the pairs differ in another respect,' follows the core appraisal principle that adjustments must be extracted from comparable sales that are identical except for the one feature being measured. Investigating reveals if the discrepancy is due to a hidden variable, allowing the appraiser to reconcile the figures or properly discard a flawed pair. Why the other choices are wrong: 'Use the larger figure for conservatism' is wrong because arbitrarily selecting a larger adjustment without a market-derived reason violates the principle of extracting supportable adjustments from the data. 'Average them and apply $15,500' is wrong because mechanically averaging two divergent figures without understanding the cause obscures the true market adjustment and is not a supported analytical technique. 'Abandon the adjustment entirely as being unsupportable' is wrong because a discrepancy does not automatically invalidate the feature's adjustment; the proper step is to investigate first, as a valid adjustment may still be extractable. Exam tip: In paired-data questions, a large spread is a red flag for a hidden difference, not a signal to average or guess. Your next step is always to investigate.
More sales-comparison-approach Questions
Excess land differs from surplus land in that excess land:
A subject property has a 3-car attached garage. The appraiser locates two valid paired sales: Sale 1 (with 3-car garage) sold for $512,000; Sale 2 (with 2-car garage) sold for $497,600. Both properties are otherwise identical — same age, quality, GLA, lot size, and neighborhood — and sold 5 days apart in a balanced market. The appraiser also confirms via public records and listing photos that no other functional or physical differences exist. What is the indicated contributory value of the *third* garage stall?
The most appropriate unit of comparison is determined by:
An appraiser analyzes three paired sales to isolate the effect of a fireplace. In Pair 1, the property with a fireplace sold for $12,000 more; in Pair 2, $10,500 more; and in Pair 3, $13,500 more. All pairs are highly similar and recent. The appraiser selects $12,000 as the final adjustment. Which principle best supports this selection?
A paired sales analysis yields an adjustment of −$15,000 for a property located on a busy arterial street. Later, the appraiser discovers that all three paired properties with arterial exposure also had 20% smaller lots than their non-arterial counterparts — a difference not initially controlled for. What is the most appropriate action per USPAP?
An appraiser identifies two comparable sales that are identical in all respects except that Sale #1 has a finished basement (1,200 sq ft) and sold for $432,000, while Sale #2 has an unfinished basement of the same size and sold for $408,000. Both sales occurred within three weeks of each other in a stable market. The appraiser intends to apply a per-square-foot adjustment for basement finish to the subject property, which has a 1,000 sq ft finished basement. What is the appropriate paired-sales-derived adjustment amount per square foot for a finished basement?
Three sales support $520,000; the borrower's purchase contract is $505,000. May the appraisal conclude above the contract price?
An appraiser develops a $3,200 adjustment for a fireplace based on a single paired sale. The subject has a fireplace; Comparable A does not. The appraiser applies +$3,200 to Comparable A. Later, the appraiser identifies a second pair showing a $4,600 fireplace contribution. The appraiser replaces the original adjustment with $3,900 — the simple average — and applies it to Comparable A. What is the appropriate USPAP-compliant action regarding the adjustment amount?
A comparable sold for $300,000 with the seller carrying a loan 2 points below market, a benefit worth $8,000. What is its cash-equivalent price?
Three comparables adjust to $412,000 (gross adj. 5%), $405,000 (gross adj. 22%), and $410,000 (gross adj. 8%). What is the best-supported value conclusion?
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