An initial narrow comparable-sale search yields insufficient evidence, and other approaches are not applicable. Further suitable market research is feasible. What is the most appropriate next step toward credible completion?
Correct Answer
A) Research other suitable sales, widening time or area where justified
Expand or refine research where needed and feasible, selecting relevant evidence and supporting any adjustments. Older or more distant sales can be useful when properly analyzed; they are not categorically inferior or forbidden. If available information and permissible conditions still cannot support credible results, do not deliver an unsupported appraisal. USPAP does not compel an appraiser to accept every assignment or exhaust unlimited research before declining.
Why This Is the Correct Answer
Option A is correct because USPAP requires the appraiser to collect, verify and analyze all information necessary for credible assignment results, and the scope of work must include the research needed to get there. Since more suitable research is feasible, widening the time frame or market area where justified is the appropriate next step. Older or more distant sales can be useful when properly analyzed.
Why the Other Options Are Wrong
Option B: Use an inapplicable approach just to fill that section of the report
Option B, using an inapplicable approach just to fill that section of the report, produces analysis that does not support the value and does nothing to fix the lack of comparable evidence.
Option C: Apply broad arbitrary adjustments to sales from unrelated markets
Option C, applying broad arbitrary adjustments to sales from unrelated markets, uses unsupported adjustments and irrelevant data, which cannot yield credible assignment results.
Option D: Deliver the opinion anyway with a general disclaimer about data
Option D, delivering the opinion anyway with a general disclaimer about data, is wrong because a disclaimer does not cure insufficient support; an unsupported appraisal should not be delivered.
Widen, don't fake
When the data is thin, widen the search with justification; don't fake support with filler approaches, arbitrary adjustments or disclaimers.
How to use: Use this phrase when a question describes insufficient comparable data and feasible further research.
Exam Tip
When further research is described as feasible, prefer the answer that does that research properly over answers that report around the gap.
Common Mistakes to Avoid
- -Believing older or more distant sales are forbidden
- -Relying on a disclaimer to excuse unsupported conclusions
- -Developing an inapplicable approach just to complete a form section
Concept Deep Dive
Analysis
This question tests the scope of work obligation to perform the research needed for credible assignment results. When the first search is too thin and further research is feasible, the appraiser should expand the search in a supported way. Shortcuts that fill space, use arbitrary adjustments or rely on a disclaimer do not produce credible results.
Background Knowledge
Under the Scope of Work Rule, the type and extent of research must be sufficient to produce credible assignment results. If the initial data set is inadequate, the appraiser can widen the search in time or geography with appropriate analysis. If credible results still cannot be supported, the appraiser should not deliver an unsupported opinion.
Real-World Application
An appraiser valuing a rural home finds only one sale within six months and two miles. She extends the search to eighteen months and a neighboring township with similar characteristics, then analyzes time and location differences to support her adjustments.
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