An appraiser has strong sales data but the client emphasises the cost approach. How should weight be assigned?
Correct Answer
A) According to the evidence, not the client's preference
Why this is correct: The appraiser's reconciliation must reflect independent professional judgment based on the quality and relevance of the data for the specific assignment. Client preference does not override this judgment. Why the other choices are wrong: "According to the client's stated requirements" would compromise objectivity. "Equally, to avoid disappointing either position" is arbitrary if data strength differs. "To the cost approach, since the client is paying" improperly subordinates judgment to client influence. Exam tip: Weighting is based on evidential support, not client preference.
Why This Is the Correct Answer
Weight follows the evidence rather than the client's preference, because reconciliation is the appraiser's independent judgment about which indication the market best supports. A client preference does not change which data is more accurate or more abundant. The appraiser can and should accommodate the client's interest by developing and reporting the cost approach and explaining its role, which addresses the client's concern without surrendering the conclusion. Documenting the reasoning lets the client see why the sales indication carried the weight.
Why the Other Options Are Wrong
Option B: According to the client's stated requirements
Client requirements govern the assignment's parameters, not the analyst's conclusions. Letting a stated requirement determine weighting would allow the client to steer the value indirectly, achieving through emphasis what could not be requested directly. The line between defining the problem and dictating the answer is exactly what independence protects.
Option C: Equally, to avoid disappointing either position
Equal weighting to avoid displeasing anyone is a diplomatic choice rather than an analytical one, and it produces a conclusion no evidence supports. Reconciliation exists to discriminate among indications, and a deliberate refusal to discriminate is a failure to reconcile. It also misleads the reader about the relative strength of the evidence.
Option D: To the cost approach, since the client is paying
Payment is what makes someone a client, not what makes their preference determinative, and every appraisal is paid for by someone. If fee payment justified deference on conclusions, appraisal independence would be meaningless in every assignment. This is the most direct statement of the error the Ethics Rule exists to prevent.
Client Sets the Question, Not the Answer
The client picks the intended use, the users, the value type, and the date. The appraiser picks the scope, the approaches, the weights, and the conclusion. Any answer that moves an item across that line is wrong.
How to use: Sort the stem's request into question-setting or answer-setting. If the client is reaching for weighting, methodology, or the conclusion, choose the option that keeps the appraiser's judgment intact.
Exam Tip
Client-pressure items nearly always resolve to independence. Look for the option that bases the decision on evidence and rejects any framing about payment, relationship, or preference.
Common Mistakes to Avoid
- -Shifting weight toward the approach a client prefers
- -Weighting approaches equally to avoid taking a position
- -Failing to explain in the report why one indication received the most weight
Concept Deep Dive
Analysis
Reconciliation is an exercise of professional judgment measured against three criteria: the appropriateness of each approach to the assignment, the accuracy of the data supporting each indication, and the quantity of that evidence. The client's role in an assignment is real but bounded. A client legitimately identifies the intended use and intended users, states the type of value needed, sets the effective date, and may impose assignment conditions that do not preclude credible results. What a client may not do is determine the weight given to an approach or the conclusion itself, because that would convert the appraiser from an independent analyst into an advocate. The Ethics Rule's Conduct section requires impartiality, objectivity, and independence and prohibits advocacy for any party, and its Management section forbids accepting an assignment contingent on reporting a predetermined result or a direction favoring the client. Where strong sales data exists and the client prefers cost, the appraiser should develop the cost approach if it is relevant, explain what it contributed, and weight according to the evidence.
Background Knowledge
You need the reconciliation criteria of appropriateness, accuracy, and quantity of evidence, and the Ethics Rule's requirements of impartiality, objectivity, and independence with its prohibition on advocacy. You should also know what a client may legitimately specify in an assignment and the rule against assignment conditions that preclude credible results.
Real-World Application
An appraiser whose client emphasizes the cost approach develops it fully, notes it corroborates the sales indication within four percent, and explains in her reconciliation that the abundant, verified sales data received primary weight while the cost approach served as a check.
More Reconciliation Questions
Reconciliation of the approaches to value is best described as which activity?
Why should the reconciliation address the quantity of evidence as well as its quality?
How long must a report be retained compared with the workfile?
What distinguishes an appraisal review from an appraisal?
An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
What should the reconciliation section explain to the reader?
How do the content obligations of the two report options differ with respect to the information analyzed?
The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam