An appraiser writes only that the sales comparison approach was given most weight. What is missing?
Correct Answer
D) The reasoning that led to that weighting
Identifying the approach given most weight does not, by itself, explain the conclusion. Provide enough reasoning about the relative applicability and evidentiary support to make the result understandable. A supported qualitative explanation may be appropriate; fixed numerical percentages are not universally required.
Why This Is the Correct Answer
Option D is correct because a reconciliation must summarize the reasoning that supports the conclusion, not merely state which approach was favored. USPAP reporting requirements call for summarizing the information analyzed and the reasoning that supports the analyses, opinions and conclusions, including reconciliation of the data and approaches. A supported qualitative explanation can meet this need.
Why the Other Options Are Wrong
Option A: The dollar amount each approach contributed
Option A, the dollar amount each approach contributed, is wrong because numerical contributions or percentages are not universally required. The missing element is the reasoning, which can be stated qualitatively.
Option B: A statement of the client's preferred approach
Option B, a statement of the client's preferred approach, is wrong because client preference is not a basis for weighting and would not explain why the sales comparison approach is most reliable.
Option C: A recalculation of the other two approaches
Option C, a recalculation of the other two approaches, is wrong because redoing calculations does not explain why one approach deserves the most weight.
Say why, not just which
Reconciliation must explain why an approach got the most weight, not only which approach it was.
How to use: Use this when a question asks what is missing from a brief reconciliation statement.
Exam Tip
When a statement names a conclusion without support, the missing piece is usually the reasoning. Answers requiring fixed percentages or client input are distractors.
Common Mistakes to Avoid
- -Stating the favored approach without explaining why
- -Believing numerical weights are always required
- -Citing client preference as a reason for weighting
Concept Deep Dive
Analysis
This question tests what a reconciliation statement must explain. Naming the approach given most weight does not tell users why. The report needs the reasoning about applicability and evidentiary support that led to the weighting.
Background Knowledge
The final value estimate is not a simple average; one or two approaches often carry more weight. The report must explain why, so intended users can understand how the appraiser moved from the indications to the final opinion.
Real-World Application
A reviewer flags a report that simply says the sales comparison approach was given most weight. The appraiser revises it to explain that five recent, verified sales of similar homes needed modest adjustments, while depreciation estimates in the cost approach were less certain.
More Reconciliation Questions
In a cost approach for an improved property, an appraiser estimates site value by sales comparison, allocation and extraction, then settles on one site-value figure before final reconciliation. How is this step best described?
An extraordinary assumption was reasonably supported, properly used and disclosed in an appraisal report. Later, the assumed information is found to be false. Which conclusion is best supported?
An otherwise applicable valuation approach cannot be developed reliably from the available data. The remaining scope can produce credible assignment results. What should the appraiser do?
May an appraiser use a hypothetical condition in any assignment?
An appraisal has a current effective date and permits an extraordinary assumption if its requirements are met. Which situation involves uncertain information rather than a fact known to be contrary to reality on that date?
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Which review best helps explain divergent cost, sales-comparison and income indications?
Two value indications are $340,000 and $392,000. What is the difference as a percentage of the lower indication, rounded to one decimal place?
An unauthorized third party requests a lender-client’s report. No due-process or other permitted disclosure exception applies. How should the appraiser respond?
An appraiser proposes to assume there are no hidden defects. Which fact would characterize that assumption as extraordinary under the USPAP 2024 definition, rather than justify dismissing it as routine boilerplate?
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