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
Investigating whether the pairs differ in another respect addresses the likeliest cause of the spread and is the only step that can improve the analysis. A wide divergence between two measurements of the same thing means at least one measurement is capturing something extra, and identifying what it is turns a problem into a second usable data point. The investigation may also reveal that both pairs are sound but describe different market segments, which is itself a finding. Whatever emerges, the appraiser can then support a conclusion rather than guess at one.
Why the Other Options Are Wrong
Option A: Use the larger figure for conservatism
Selecting the larger figure is not conservative and is not supported by anything in the data; it is simply a preference dressed as caution. A larger adjustment can push a value indication up or down depending on whether the comparable is superior or inferior, so the direction of the supposed conservatism is not even determinate. Choosing by size rather than by evidence abandons the support requirement.
Option B: Average them and apply $15,500
Averaging assumes the two pairs are equally reliable, which is precisely the question the spread calls into doubt. It also buries the anomaly, so the appraiser never learns which pair was contaminated and repeats the error on the next assignment. A mechanical mean of a good measurement and a bad one is a worse measurement, not a better one.
Option D: Abandon the adjustment entirely as being unsupportable
Abandoning the adjustment discards the feature's contribution entirely, implicitly asserting it is worth zero, which the data plainly contradicts since both pairs show a substantial positive figure. Setting an adjustment to zero is itself an adjustment and needs support just as any other number does. Investigation may well yield a perfectly usable figure.
A Spread Is a Clue
Two measurements of one thing should agree. When they do not, something extra is hiding in one of them. Find the extra thing before you touch the numbers.
How to use: When a stem shows divergent paired results, choose the investigate option. Reject averaging, picking by size, and abandoning the adjustment, all of which skip the diagnosis.
Exam Tip
Time is the difference candidates most often overlook. Two pairs from different quarters in a moving market will diverge even when both are otherwise clean.
Common Mistakes to Avoid
- -Averaging divergent paired indications without diagnosing the spread
- -Failing to time-adjust pairs from different periods
- -Treating a zero adjustment as needing no support
Concept Deep Dive
Analysis
Paired sales analysis rests on isolation: the entire price gap is attributed to one difference because one difference is all there is. When two pairs measuring the same feature return $12,000 and $19,000, the spread is a diagnostic signal that something in that premise has failed. The most common explanation is a second, unnoticed difference in one pair, whether in location, condition, lot, view, or a concession nobody verified. Other explanations are equally worth chasing: the pairs may sit in different price tiers where the feature contributes different amounts, they may have transacted at different points in a moving market without a time adjustment, or the feature itself may differ in quality between the two pairs. Only after the appraiser understands the cause can she decide what to do, which might be netting out the second difference, discarding the contaminated pair, weighting the cleaner one more heavily, or concluding that the feature genuinely contributes differently across segments.
Background Knowledge
You need paired sales analysis and its isolation requirement, the practice of time-adjusting pairs before comparison, and the reconciliation criteria of appropriateness, accuracy, and quantity of evidence. You should also know the alternative support techniques, including grouped pairs, multiple regression, cost-based reasoning, and capitalized rent differentials.
Real-World Application
An appraiser with $12,000 and $19,000 indications for a three-season porch discovers the $19,000 pair also differed in lot size. She derives a lot adjustment from other sales, nets it out, finds the porch contribution near $13,000, and reports both the raw and adjusted derivations.
More Sales Comparison Questions
Excess land differs from surplus land in that excess land:
A paired sales analysis reveals that homes with stainless-steel appliances sell for $2,100 more than identical homes with standard appliances — but only when the homes are priced below $350,000. In the subject’s neighborhood, median sale price is $410,000. What is the appraiser’s obligation regarding the $2,100 appliance adjustment?
GLA differs by 210 sq ft between subject and comparable. Paired sales support $65 per sq ft of living area. The line adjustment is:
Paired sales are drawn from transactions six months apart in a stable market. The time adjustment needed is:
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A comparable sold 8 months ago for $250,000 in a market appreciating 6% per year. What is the time-adjusted price?
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