Four garage-pair indications are $11,200, $13,800, $9,400 and $14,600. Independent verification establishes unaccounted-for finish differences in the $9,400 pair, and the analyst justifies excluding it. What mean of the remaining amounts and reasoning are appropriate?
Correct Answer
A) $13,200; the exclusion rests on verified confounding rather than an arbitrary low-value rule
With the stipulated supported exclusion, the retained amounts total 11200+13800+14600=$39,600, and their unweighted mean is $13,200. Exclusion must rest on verified confounding or other supported analytical grounds, not merely on the observation's magnitude; disclosing an arbitrary exclusion does not make it valid, no rule requires routinely discarding the lowest and highest amounts, and keeping a pair known to be confounded merely to enlarge the sample does not make the result more reliable.
Why This Is the Correct Answer
Option A is correct because the retained indications total $11,200 + $13,800 + $14,600 = $39,600, and $39,600 / 3 = $13,200. The exclusion is justified by verified confounding in that pair, which is a valid analytical reason, rather than by its low magnitude.
Why the Other Options Are Wrong
Option B: $13,200; disclosing an arbitrary exclusion of the low pair in the report alone makes it valid
Option B has the right figure, $13,200, but claims that disclosing an arbitrary exclusion of the low pair makes it valid. Disclosure does not cure an unsupported exclusion; the exclusion is valid here only because verification found confounding.
Option C: $12,500; the lowest and highest amounts are discarded as a matter of course
Option C, $12,500, discards both the lowest and highest amounts as a matter of course: ($11,200 + $13,800) / 2 = $12,500. Exclusions need a supported reason; here only the $9,400 pair has verified confounding, and the mean of the remaining three is $39,600 / 3 = $13,200.
Option D: $12,250; the confounded pair is retained because sample size outweighs data quality
Option D, $12,250, averages all four indications, $49,000 / 4 = $12,250, keeping a pair that verification showed is confounded. A larger sample does not make an unreliable observation usable; excluding it gives $39,600 / 3 = $13,200.
Exclude for cause, not size
An outlier can be removed only when you can name the reason it is unreliable, not just because it is the smallest or largest.
How to use: Use this to judge any answer that drops a data point from an analysis.
Exam Tip
Check both parts of a two-part answer: the arithmetic and the reasoning must both be correct.
Common Mistakes to Avoid
- -Dropping the lowest or highest indication without a verified reason
- -Believing that disclosure alone makes an arbitrary exclusion acceptable
- -Averaging all indications including one known to be confounded
Concept Deep Dive
Analysis
This question tests both arithmetic and the reasoning for excluding a data point. The $9,400 pair is excluded because independent verification found an uncontrolled finish difference, not because it is the lowest value. The mean of the remaining three indications is then calculated.
Background Knowledge
Paired sales indications often vary, and appraisers reconcile them by examining why they differ. A data point may be set aside when verification shows it is affected by an uncontrolled difference, but excluding observations simply because they are high or low biases the result.
Real-World Application
An appraiser studying garage contributions finds one pair where the lower-priced home turns out to have dated interior finishes. Because that difference was not controlled, the appraiser sets the pair aside, documents the reason, and averages the remaining pairs.
More Sales Comparison Questions
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Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
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Previous Question
Four closed sales are ranked from most to least desirable overall for a 2,180-sf two-story home that is currently listed for sale at $459,900: Sale 3, $471,000; Sale 1, $458,000; Sale 4, $446,500; Sale 2, $437,000. The subject is judged inferior to Sales 3 and 1 and superior to Sales 4 and 2. What value range does the ranking indicate for the subject?
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