An appraiser has extraction results from eight sales and wants a single land value. What is the appropriate step?
Correct Answer
B) Reconcile them, weighing the most comparable sales
Reconcile the indications according to the comparability and reliability of each sale and its improvement estimates. An arithmetic mean is appropriate only if equal weighting is supported; selecting the highest without evidence is biased. The final conclusion remains the appraiser’s reasoned responsibility.
Why This Is the Correct Answer
Option B is correct because the appraiser should reconcile the indications, giving the most weight to the sales that are most comparable and whose improvement estimates are most reliable. Reconciling the value indicators from the comparable group produces a single, supported value. This reflects judgment about data quality rather than a formula.
Why the Other Options Are Wrong
Option A: Adopt the arithmetic mean of all eight results
Option A, adopting the arithmetic mean of all eight results, is wrong because a simple average gives equal weight to each sale. That is appropriate only if equal weighting is supported, and it ignores differences in comparability and reliability.
Option C: Select the highest result to avoid understating land
Option C, selecting the highest result to avoid understating land, is wrong because choosing an extreme without evidence introduces bias. The goal is a supported, credible value, not a high one.
Option D: Report the range and leave the choice to the client
Option D, reporting the range and leaving the choice to the client, is wrong because developing a value conclusion is the appraiser's responsibility. Handing the decision to the client abandons the appraiser's analytical role.
Weigh, don't average
Reconciliation weighs the best evidence most heavily instead of averaging everything equally.
How to use: Use this when a question asks how to reach one value from several indications.
Exam Tip
Choose answers that rely on comparability and reliability over mechanical averages, extremes or deferring to the client.
Common Mistakes to Avoid
- -Averaging all indications without considering comparability
- -Leaving the final value choice to the client
Concept Deep Dive
Analysis
This question tests reconciliation of multiple land value indications. The appraiser should weigh each extraction result according to how comparable and reliable it is, rather than mechanically averaging or picking an extreme. The final value conclusion is the appraiser's reasoned responsibility.
Background Knowledge
Reconciliation is the process of analyzing alternative value indications to reach a final conclusion. It considers the quantity and quality of data and the reliability of each indication. Weighting the most comparable evidence most heavily is central to reconciliation.
Real-World Application
An appraiser has extraction results from eight rural sales ranging widely. Two sales are very similar to the subject with recent, well-supported building estimates, so the appraiser gives them the most weight in the land value conclusion.
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