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
Why this is correct: Reconciliation is the process of analyzing and weighting different value indications to arrive at a final conclusion. For eight extracted land values, the appraiser must weigh each result based on the comparability and reliability of its source sale, not simply average them. Why the other choices are wrong: "Adopt the arithmetic mean of all eight results" applies equal weight to all, ignoring differences in data quality. "Select the highest result to avoid understating land" is biased and unsupported. "Report the range and leave the choice to the client" abdicates the appraiser's professional judgment. Exam tip: Reconciliation requires reasoned weighting, not mechanical averaging.
Why This Is the Correct Answer
Multiple indications are reconciled by weighing each according to comparability and data quality rather than combined mechanically, since the indications differ in reliability.
Why the Other Options Are Wrong
Option A: Adopt the arithmetic mean of all eight results
A mean weights a poorly supported indication equally with a well-supported one, discarding the appraiser's judgment.
Option C: Select the highest result to avoid understating land
Selecting the highest result is advocacy rather than analysis and breaches the obligation of impartiality.
Option D: Report the range and leave the choice to the client
The appraiser is engaged to reach an opinion. Reporting a range and deferring the choice abdicates the assignment.
Weigh, Do Not Average
Weigh, Do Not Average. Eight indications are not eight equal votes.
How to use: Rank the indications by comparability and data quality first, then explain the weighting in the report.
Exam Tip
Extraction is least reliable where improvements represent most of the value, since depreciation error transfers fully into the land figure.
Common Mistakes to Avoid
- -Averaging indications of differing quality
- -Selecting a figure by preference rather than support
- -Reporting a range instead of an opinion
Concept Deep Dive
Analysis
Eight extraction results are eight indications of the same land value, and reducing them to one is a reconciliation exercise rather than an arithmetic one. Reconciliation weighs each indication by its quality: how comparable the improved sale was to the subject site, how reliable the depreciation estimate behind it, how recent the sale, and how much of the total value the improvements represented — since extraction is least reliable where improvements dominate. A mean treats a poorly supported indication from a dissimilar property as equal to a well-supported one from a near-identical site, which discards exactly the judgment the appraiser is engaged to exercise. Selecting the highest result is advocacy rather than analysis. And reporting a range while leaving the choice to the client abdicates the assignment, since the appraiser is engaged to reach an opinion. The reconciliation reasoning belongs in the report so an intended user can follow why some indications carried more weight.
Background Knowledge
Reconciliation weighs multiple value indications according to the quality and quantity of evidence supporting each and their relevance to the assignment, rather than averaging them.
Real-World Application
An appraiser weights three extractions from closely comparable sites heavily and gives minimal weight to five from dissimilar properties, explaining the reasoning.
More Land/Site Questions
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