EstatePass
sales-comparison-approachmedium

Beyond matched sale pairs, which technique can isolate a feature's contributory value from a larger dataset?

Correct Answer

D) Regression analysis holding other variables constant

Why this is correct: Multiple regression analysis is a statistical technique that estimates the relationship between a dependent variable (like sale price) and several independent variables (like square footage, bedrooms, location, etc.). It can isolate the marginal contribution of a single feature (e.g., a pool) while statistically "holding constant" or controlling for the influence of all other variables in the model. Why the other choices are wrong: "Averaging all sale prices in the ZIP code" provides no feature-specific value isolation. "Counting the active listings that mention the feature prominently" is a marketing measure, not a valuation technique. "Ranking sales by gross price alone" ignores all property characteristics. Exam tip: Regression is the advanced, data-intensive version of paired sales analysis. It's powerful but requires a sufficient sample size and proper model specification.

Answer Options
A
Averaging all sale prices in the ZIP code
B
Counting the active listings that mention the feature prominently
C
Ranking sales by gross price alone
D
Regression analysis holding other variables constant

Why This Is the Correct Answer

Why this is correct: Multiple regression analysis is a statistical technique that estimates the relationship between a dependent variable (like sale price) and several independent variables (like square footage, bedrooms, location, etc.). It can isolate the marginal contribution of a single feature (e.g., a pool) while statistically "holding constant" or controlling for the influence of all other variables in the model. Why the other choices are wrong: "Averaging all sale prices in the ZIP code" provides no feature-specific value isolation. "Counting the active listings that mention the feature prominently" is a marketing measure, not a valuation technique. "Ranking sales by gross price alone" ignores all property characteristics. Exam tip: Regression is the advanced, data-intensive version of paired sales analysis. It's powerful but requires a sufficient sample size and proper model specification.

Was this explanation helpful?

More sales-comparison-approach Questions

Excess land differs from surplus land in that excess land:

A subject property has a 3-car attached garage. The appraiser locates two valid paired sales: Sale 1 (with 3-car garage) sold for $512,000; Sale 2 (with 2-car garage) sold for $497,600. Both properties are otherwise identical β€” same age, quality, GLA, lot size, and neighborhood β€” and sold 5 days apart in a balanced market. The appraiser also confirms via public records and listing photos that no other functional or physical differences exist. What is the indicated contributory value of the *third* garage stall?

The most appropriate unit of comparison is determined by:

An appraiser analyzes three paired sales to isolate the effect of a fireplace. In Pair 1, the property with a fireplace sold for $12,000 more; in Pair 2, $10,500 more; and in Pair 3, $13,500 more. All pairs are highly similar and recent. The appraiser selects $12,000 as the final adjustment. Which principle best supports this selection?

A paired sales analysis yields an adjustment of βˆ’$15,000 for a property located on a busy arterial street. Later, the appraiser discovers that all three paired properties with arterial exposure also had 20% smaller lots than their non-arterial counterparts β€” a difference not initially controlled for. What is the most appropriate action per USPAP?

An appraiser identifies two comparable sales that are identical in all respects except that Sale #1 has a finished basement (1,200 sq ft) and sold for $432,000, while Sale #2 has an unfinished basement of the same size and sold for $408,000. Both sales occurred within three weeks of each other in a stable market. The appraiser intends to apply a per-square-foot adjustment for basement finish to the subject property, which has a 1,000 sq ft finished basement. What is the appropriate paired-sales-derived adjustment amount per square foot for a finished basement?

Three sales support $520,000; the borrower's purchase contract is $505,000. May the appraisal conclude above the contract price?

An appraiser develops a $3,200 adjustment for a fireplace based on a single paired sale. The subject has a fireplace; Comparable A does not. The appraiser applies +$3,200 to Comparable A. Later, the appraiser identifies a second pair showing a $4,600 fireplace contribution. The appraiser replaces the original adjustment with $3,900 β€” the simple average β€” and applies it to Comparable A. What is the appropriate USPAP-compliant action regarding the adjustment amount?

A comparable sold for $300,000 with the seller carrying a loan 2 points below market, a benefit worth $8,000. What is its cash-equivalent price?

Three comparables adjust to $412,000 (gross adj. 5%), $405,000 (gross adj. 22%), and $410,000 (gross adj. 8%). What is the best-supported value conclusion?

People Also Study

Practice More Appraiser Questions

Access all practice questions with progress tracking and adaptive difficulty to pass your Appraiser exam.

Start Practicing