An appraiser notices a model consistently overstates value in one neighborhood. What is the appropriate response?
Correct Answer
C) Treat that model's output as unsupported there
Why this is correct: The governing concept is that an appraiser must not rely on demonstrably flawed data or methods. If a model shows a consistent, systematic error (bias) in a specific area, its output for that area is not credible support for a value conclusion. Why the other choices are wrong: "Apply a fixed percentage discount to its outputs" is wrong; this would be an unsupported, arbitrary adjustment. "Report the model's figure and note the tendency" is wrong; merely noting a known flaw does not make the figure reliable. "Continue using it, since patterns even out over time" is wrong; a known systematic error should not be ignored. Exam tip: A tool with a known, uncorrectable bias in a specific context cannot provide credible results for that context.
Why This Is the Correct Answer
Why this is correct: The governing concept is that an appraiser must not rely on demonstrably flawed data or methods. If a model shows a consistent, systematic error (bias) in a specific area, its output for that area is not credible support for a value conclusion. Why the other choices are wrong: "Apply a fixed percentage discount to its outputs" is wrong; this would be an unsupported, arbitrary adjustment. "Report the model's figure and note the tendency" is wrong; merely noting a known flaw does not make the figure reliable. "Continue using it, since patterns even out over time" is wrong; a known systematic error should not be ignored. Exam tip: A tool with a known, uncorrectable bias in a specific context cannot provide credible results for that context.
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Under current USPAP guidance, what is the output of an automated valuation model before an appraiser analyzes it?
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Which assignment type still requires the appraiser to develop an opinion of value?
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