An appraiser must analyze the subject's current listing, if any, because:
Correct Answer
B) It is market evidence about the subject itself
Why this is correct: The subject's current listing is direct market evidence about the property itself. Analyzing it is required by USPAP (Standard 1-2(b)(ix)) to understand market reaction to the asking price, which informs the value conclusion. Why the other choices are wrong: 'Listings determine the value conclusion' is wrong; listings are evidence, not the sole determinant of value. 'Standards require listing prices be adopted' is incorrect; standards require analysis, not adoption. 'Lenders will not accept unlisted properties' is false; listing status is not a lender acceptance criterion. Exam tip: Remember: Analyze the listing, but don't be bound by it. It's evidence, not the answer.
Why This Is the Correct Answer
A current listing is direct evidence about the subject, which is exactly what makes it worth mandatory analysis when every other data point in the report is about some other property. It reveals seller expectations, exposure time to date, and the market's response through days on market and price changes. Analyzing it also lets the appraiser test the credibility of a conclusion that sits above the asking price, which almost always requires explanation. Choice B identifies the evidentiary character of the listing without overstating what it decides.
Why the Other Options Are Wrong
Option A: Listings determine the value conclusion
A listing is one party's unilateral asking price and has not been tested by a buyer, so it cannot determine value on its own. Sellers overprice and underprice for reasons ranging from bad advice to urgency, and value is the price a willing buyer and willing seller would agree on, not the price one side posts. Treating the listing as determinative would also make the rest of the appraisal pointless.
Option C: Standards require listing prices be adopted
The standard requires analysis, not adoption, and the two are not close. Adopting the list price would substitute the seller's opinion for the appraiser's and would violate the requirement that the opinion be developed independently. What the appraiser must do is consider the listing, reconcile it against the other evidence, and explain any meaningful divergence.
Option D: Lenders will not accept unlisted properties
No lender conditions a loan on whether the collateral is listed, and in fact an active listing during a refinance is a matter to disclose and analyze rather than a disqualifier. The analysis obligation comes from the standards and applies in estate, litigation, and tax assignments where no lender exists. The option invents a market rule to explain a professional requirement.
Evidence, Not Verdict
The listing is a witness, not the judge. It testifies about the subject, which no comparable can do, and the appraiser weighs the testimony against everything else before ruling.
How to use: When an option says a listing determines, controls, or must be adopted, strike it. Keep the option that treats the listing as information the appraiser analyzes and explains.
Exam Tip
Watch the verb in listing and sale history questions. Analyze and consider are compliant; adopt, match, and cap are not.
Common Mistakes to Avoid
- -Ignoring an active listing because it is not a closed sale
- -Concluding above the asking price without investigating or explaining why
- -Reporting the listing in the data section without analyzing it in the reconciliation
Concept Deep Dive
Analysis
USPAP requires the appraiser to analyze all agreements of sale, options, and listings of the subject property that are current as of the effective date, along with the subject's recent sale history, because these are the only transaction data that describe the subject itself rather than a substitute for it. A current listing carries several kinds of information at once: the price a seller with actual knowledge of the property is asking, the length of exposure the market has already given it, and any reductions that show how the market has answered. Asking prices generally set a practical upper boundary on value, since a buyer will rarely pay more than what the property can be bought for today, and a listing sitting well below the appraiser's conclusion is a signal that demands investigation and explanation. The rule is an analysis requirement rather than an adoption requirement, so the listing informs the conclusion and must be reported and reconciled, but it does not replace the appraiser's judgment.
Background Knowledge
You need the development standard that requires analysis of current agreements of sale, options, and listings of the subject, together with its recent sale history, and the reporting requirement that this analysis be summarized. You should also understand why asking prices generally act as an upper boundary on value and how days on market and price reductions signal market response.
Real-World Application
An appraiser on a refinance finds the subject actively listed at $415,000 after 120 days and one reduction, while the sales grid supports $440,000. She reports the listing, the exposure, and the reduction, investigates and finds the agent priced it to generate traffic, and explains why the market evidence still supports the higher conclusion.
More USPAP Questions
Which statement best defines a hypothetical condition under USPAP?
According to the Competency Rule, if an appraiser lacks the knowledge and experience to complete an assignment competently, which action is NOT acceptable?
An appraiser runs only the sales comparison approach on a standard tract home and omits the cost and income approaches. Under Standard 1 this is:
A value opinion for a subdivision as if fully built out two years from now is what kind of assignment, and what does it require?
A hypothetical condition differs from an extraordinary assumption in that a hypothetical condition:
An appraiser must disclose in the certification whether they have:
A client-imposed requirement — 'use only comps from our approved list' — is best described as:
Under Standard 1, when developing a real property appraisal, an appraiser must:
The certification required by Standards Rule 2-3 must be signed by:
According to Standard 1, when developing an opinion of market value, an appraiser must analyze:
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