An appraiser is offered a tool that drafts adjustment support automatically. What must be established before use?
Correct Answer
B) That the output is supportable for this market
Before relying on automated adjustment support, the appraiser must adequately understand the method, its inputs and limitations, and establish that its use and output are supportable for this assignment and market. Retain the evidence needed to support the analysis. Client payment, local popularity, and vendor indemnification alone do not establish credibility or transfer the appraiser’s professional duties. The significance of an error depends on its actual effect; not every defect automatically meets the substantial-error threshold.
Why This Is the Correct Answer
Option B is correct because the appraiser must understand the tool's method, inputs and limitations and establish that its output is supportable for the specific market before relying on it. Adjustments must rest on market evidence the appraiser can defend. The appraiser should also retain the evidence that supports the analysis in the workfile.
Why the Other Options Are Wrong
Option A: That the client will pay for the subscription
Option A is wrong because whether the client pays for the subscription is a business matter. Who funds the tool says nothing about whether its adjustment output is credible for this market.
Option C: That the tool is used by other local appraisers
Option C is wrong because use of the tool by other local appraisers is only popularity. Wide adoption does not demonstrate that the output is supported for this assignment.
Option D: That the vendor indemnifies the appraiser fully
Option D is wrong because a vendor promise to indemnify the appraiser fully is a contractual protection, not evidence of reliability. Indemnification does not transfer the appraiser's professional duty to support the adjustments.
Tool helps, appraiser proves
Think of any automated tool as an assistant whose work you must check: the tool can draft, but only the appraiser can support. If you cannot explain and defend the output for this market, you cannot use it.
How to use: Use this when an answer choice offers payment, popularity or a contract as the reason to trust a tool.
Exam Tip
When a question asks what must be established before using a tool, look for the answer about supportability or credibility for the assignment, not cost, reputation or legal protection.
Common Mistakes to Avoid
- -Assuming a tool is reliable because many local appraisers use it
- -Believing vendor indemnification shifts responsibility for the analysis
- -Adopting generated adjustments without understanding the method or its limits
Concept Deep Dive
Analysis
This question tests the appraiser's duty when an automated tool offers to generate adjustment support. The key is that responsibility for credible results stays with the appraiser, so the threshold question is whether the tool's method and output can be supported for this assignment and market. Business arrangements, popularity and contracts do not answer that question.
Background Knowledge
Adjustments in the sales comparison approach must be supported by market evidence and analysis. Automated tools can assist, but the appraiser remains responsible for understanding the method and confirming that its results are credible for the assignment.
Real-World Application
A software vendor offers an appraiser a module that generates paired-sales adjustment grids automatically. Before using it in a rural market with few sales, the appraiser tests the suggested adjustments against local sales data and keeps that testing in the workfile.
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