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 the data and applicability of both before reconciling
Different paired indications can reflect sampling variation, unrecognized differences, market segments or measurement error. Verify the transactions and test comparability before reconciling the indications; the difference alone proves neither a hidden cause nor the correct average.
Why This Is the Correct Answer
Option C is correct because an appraiser must collect, verify and analyze the information needed for credible results. Investigating both pairs reveals whether one has an unrecognized difference or a data problem, and only then can the indications be reconciled with support. The report should summarize the supporting evidence and technique used.
Why the Other Options Are Wrong
Option A: Average the two pairs to $15,500 without further analysis
Option A, averaging the two pairs to $15,500 without further analysis, computes ($12,000 + $19,000) ÷ 2 = $15,500 but skips verification. The spread may come from a flawed pair, so an unexamined average is not supported.
Option B: Assume the higher of the two indications is the correct one
Option B, assuming the higher of the two indications is correct, picks $19,000 without any reason. Nothing in the data shows the higher pair is more reliable than the $12,000 pair.
Option D: Reject all paired analysis as an inherently invalid technique
Option D, rejecting all paired analysis as inherently invalid, overreacts to one discrepancy. Paired sales is an accepted technique for supporting adjustments; conflicting results call for investigation, not abandonment.
Conflict means investigate
When two pairs disagree, look at the data before you do any math.
How to use: Use this when a question shows two different paired sales results for the same feature.
Exam Tip
Answers that verify and analyze data before reconciling are usually stronger than answers that average, pick one, or discard the method.
Common Mistakes to Avoid
- -Averaging conflicting pairs without verifying them
- -Choosing the indication that supports a higher value
- -Abandoning paired analysis after one inconsistent result
Concept Deep Dive
Analysis
This question tests how to handle conflicting paired sales indications. Different results can come from sampling variation, unrecognized differences, different market segments or measurement error. The appraiser must verify and analyze the data before reconciling.
Background Knowledge
Paired sales analysis isolates the value effect of a single feature, but real pairs rarely differ in only one way. When pairs give different results, the appraiser checks the transactions and comparability, then reconciles the supported indications.
Real-World Application
An appraiser finds one pair showing $12,000 for a pool and another showing $19,000. On checking, the second pair's pool home also had a remodeled kitchen, so the appraiser gives more weight to the first pair and explains why.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
Which of these is listed by Fannie Mae as a sales or financing concession?
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