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Sales Comparisonmedium16.4% of exam

An appraiser uses paired sales to estimate the adjustment for proximity to a public park. Four valid pairs yield adjustments of +$7,200, +$6,800, +$8,100, and +$7,900. The appraiser calculates the mean ($7,500) and notes the range is $1,300. Before applying the adjustment, the appraiser adjusts the $7,500 downward by 5% to reflect weakening buyer preference observed in the most recent two months of listings. Which USPAP requirement does this downward revision most directly satisfy?

Correct Answer

B) Standards Rule 1-4: Adjustments must be supported by market evidence

Standards Rule 1-4 states that adjustments must be 'based on market-derived data' and 'supported by evidence indicating the degree of influence' of the characteristic. Simply averaging paired results is insufficient if market conditions have shifted — the appraiser must reconcile and support the final adjustment with *current* market evidence. By modifying the mean to reflect observed weakening demand, the appraiser demonstrates ongoing support from market behavior (e.g., longer time-on-market for park-proximate homes, price reductions), satisfying SR 1-4’s requirement for supportable, market-responsive adjustments.

Answer Options
A
Standards Rule 1-2: Data must be current and relevant
B
Standards Rule 1-4: Adjustments must be supported by market evidence
C
Standards Rule 1-5: The report must identify the effective date of the appraisal
D
Advisory Opinion 17: Paired sales analysis must isolate the influence of a single element of comparison

Why This Is the Correct Answer

Option B identifies the requirement being satisfied: adjustments must be supported by market evidence, and the appraiser here is replacing a purely historical average with a figure reconciled to current observed behavior. The four pairs are the starting evidence, and the recent listing activity is additional evidence about how much weight the older indications still deserve. Supporting the final number, not merely computing it, is what the development standard demands, and the workfile should document both bodies of evidence.

Why the Other Options Are Wrong

Option A: Standards Rule 1-2: Data must be current and relevant

Currency of data matters, but the rule cited addresses identification of the appraisal problem, including the client, intended use, effective date, and relevant characteristics, rather than stating a general data-freshness command. More importantly, the appraiser's action was not selecting data; it was quantifying an adjustment from evidence. The option describes a real concern attached to the wrong requirement.

Option C: Standards Rule 1-5: The report must identify the effective date of the appraisal

Identifying and reporting the effective date is required, but the appraiser here did not change or clarify a date; she changed the size of an adjustment. Nothing about the revision turns on communicating when the opinion applies. The option also misattributes the effective-date duty to a rule that deals with a different subject.

Option D: Advisory Opinion 17: Paired sales analysis must isolate the influence of a single element of comparison

The statement that paired analysis should isolate a single element is sound appraisal technique, which is what makes the choice attractive, but the advisory opinion number attached to it addresses a different topic entirely. Isolation also describes how the original pairs were constructed, not what the downward revision accomplished. Never accept a citation just because the sentence next to it sounds correct.

Evidence In, Adjustment Out

Every number in the grid must have a paper trail behind it. If you can point to sales, listings, or interviews that produced the figure, you are inside the support rule; if you cannot, no other rule will rescue you.

How to use: When a stem describes the appraiser changing an adjustment amount, ask what evidence drove the change. If the answer is market behavior, the support requirement is the rule being satisfied.

Exam Tip

Distractor citations often attach true appraisal sentences to unrelated rule numbers. Judge the option by whether the rule addresses the action described, not by whether the sentence sounds professional.

Common Mistakes to Avoid

  • -Applying a paired-sales average without asking whether the market has moved since those sales
  • -Revising an adjustment by an unsupported round percentage and calling it judgment
  • -Confusing the duty to identify the appraisal problem with the duty to support adjustments

Concept Deep Dive

Analysis

Paired sales produce historical indications, and the market can move after those sales closed. The development standard requires the appraiser to collect, verify, and analyze the information necessary for credible results and to base adjustments on market evidence rather than on habit or on a stale average. When recent listing behavior shows buyer preference for a feature weakening, that behavior is itself market evidence, and adjusting the indicated amount to reflect it keeps the adjustment tied to conditions as of the effective date. The discipline is that the revision must be supported too: the appraiser should be able to show the listing data, the price reductions, or the marketing times that justify the change rather than applying a round percentage by instinct.

Background Knowledge

You need to know that adjustments must be derived from and supported by market evidence as of the effective date, and that paired sales are one source among several. You also need enough familiarity with the structure of the standards to notice when an option pairs a genuine principle with an unrelated rule number.

Real-World Application

An appraiser working a neighborhood next to a park notices park-adjacent listings sitting longer and taking reductions after a summer of construction noise, documents those listings, and moderates the park adjustment derived from spring sales.

market supportpaired saleseffective dateadjustment derivation
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