Five comparables produce adjusted indications of $301,000, $304,000, $306,000, $309,000 and $412,000. What should the appraiser do before concluding?
Correct Answer
C) Examine the $412,000, which sits far outside the cluster the other four form
Why this is correct: four indications inside an eight-thousand-dollar band and a fifth a hundred thousand above it is a sign that something in the fifth is wrong — a data error, a different property type, or an adjustment that was never made. Why the other choices are wrong: being lowest is not itself a defect; averaging five values when one is an outlier lets the error set the answer; and proximity to a mean that the outlier has already distorted says nothing about reliability.
Why This Is the Correct Answer
Why this is correct: four indications inside an eight-thousand-dollar band and a fifth a hundred thousand above it is a sign that something in the fifth is wrong — a data error, a different property type, or an adjustment that was never made. Why the other choices are wrong: being lowest is not itself a defect; averaging five values when one is an outlier lets the error set the answer; and proximity to a mean that the outlier has already distorted says nothing about reliability.
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