Using the same sale-price/original-list-price definition and comparable samples, a segment’s average sale-to-list ratio rises from 96% to 100%. What limited interpretation is most supportable?
Correct Answer
D) Average sale prices are closer to the original asking prices
The sale-to-list ratio is sale price divided by the stated list price basis. A comparable-segment rise from 96% to 100% shows a smaller average discount under a consistent method, but does not prove every home sold at asking or identify causes. Check composition, concessions, original versus final list prices and other market evidence.
Why This Is the Correct Answer
Option D is correct because the sale-to-list ratio is sale price divided by original list price. A rise from 96 percent to 100 percent means the average discount from original asking price shrank. That is a limited, supportable reading that does not claim more than the statistic shows.
Why the Other Options Are Wrong
Option A: The ratio proves no change in any market condition
Option A, that the ratio proves no change in any market condition, contradicts the data. A move from 96 percent to 100 percent shows a change in how close sale prices came to asking prices.
Option B: The ratio shows sellers accepted larger discounts than before
Option B, that sellers accepted larger discounts than before, reverses the meaning. A higher ratio means smaller average discounts, not larger ones.
Option C: Each listing in the segment sold at its original asking price
Option C, that each listing sold at its original asking price, reads too much into an average. An average of 100 percent can include some sales above and some below asking.
Higher ratio, smaller discount
As the sale-to-list ratio rises toward 100 percent, the gap between asking and selling price shrinks.
How to use: Use this link to read the direction of any sale-to-list change.
Exam Tip
Choose the interpretation that matches what the statistic measures without overstating it. Averages do not describe each individual sale.
Common Mistakes to Avoid
- -Reading a higher ratio as larger discounts
- -Assuming an average of 100 percent means each home sold at asking
- -Mixing original and final list prices when comparing periods
Concept Deep Dive
Analysis
This question tests careful interpretation of a sale-to-list ratio change. A rise from 96 percent to 100 percent, measured the same way on comparable samples, means sale prices on average moved closer to original asking prices. It does not by itself prove that each home sold at asking or explain why the change occurred.
Background Knowledge
The sale-to-list ratio compares what properties sold for with their list prices. Whether original or final list price is used changes the result, so the method must stay consistent. Appraisers check composition, concessions and other market evidence before inferring causes from a change in the ratio.
Real-World Application
An appraiser sees a segment's average sale-to-list ratio rise from 96 percent to 100 percent over a year. The appraiser notes that sale prices are closer to asking prices. The appraiser then checks concessions and the mix of sales before linking the change to market strength.
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