Five adjusted sales indicate $305,000 at 8% gross adjustment, $309,000 at 11%, $312,000 at 9%, $318,000 at 21% and $301,000 at 14%. The appraiser relies only on those requiring under 12% gross adjustment. What value do the retained sales indicate on average?
Correct Answer
A) $308,667
Why this is correct: three sales fall under 12% — $305,000, $309,000 and $312,000. Calculation: ($305,000 + $309,000 + $312,000) / 3 = $308,667. Why the other choices are wrong: $309,000 is the mean of all five and includes the 21% sale the appraiser excluded; $305,000 and $312,000 are single retained indications rather than their average.
Why This Is the Correct Answer
Why this is correct: three sales fall under 12% — $305,000, $309,000 and $312,000. Calculation: ($305,000 + $309,000 + $312,000) / 3 = $308,667. Why the other choices are wrong: $309,000 is the mean of all five and includes the 21% sale the appraiser excluded; $305,000 and $312,000 are single retained indications rather than their average.
More Reconciliation Questions
Reconciliation of the approaches to value is best described as which activity?
Why should the reconciliation address the quantity of evidence as well as its quality?
How long must a report be retained compared with the workfile?
What distinguishes an appraisal review from an appraisal?
An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
What should the reconciliation section explain to the reader?
How do the content obligations of the two report options differ with respect to the information analyzed?
The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
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