For a special-purpose property such as a rural church with no comparable sales, reconciliation will typically:
Correct Answer
A) Lean on the cost approach, explaining the sales approach's limits
Why this is correct: For special-purpose properties (like a church) with no comparable sales, the sales comparison approach is unreliable. The cost approach (cost to replace minus depreciation) often becomes the primary approach, but its limitations and the weakness of other approaches must be explained. Why the other choices are wrong: Leaning on sales comparison with thin data is not credible. Concluding it cannot be appraised is a last resort; an appraisal is often still possible. Imputed rent for a non-income-producing church is not applicable. Exam tip: No sales? The cost approach gets the most weight, but you must explain why.
Why This Is the Correct Answer
Why this is correct: For special-purpose properties (like a church) with no comparable sales, the sales comparison approach is unreliable. The cost approach (cost to replace minus depreciation) often becomes the primary approach, but its limitations and the weakness of other approaches must be explained. Why the other choices are wrong: Leaning on sales comparison with thin data is not credible. Concluding it cannot be appraised is a last resort; an appraisal is often still possible. Imputed rent for a non-income-producing church is not applicable. Exam tip: No sales? The cost approach gets the most weight, but you must explain why.
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Reconciliation of the approaches to value is best described as which activity?
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Which of the following is a written report option named in the current edition of USPAP?
What distinguishes qualitative from quantitative analysis in the sales comparison approach?
Why should the reconciliation address the quantity of evidence as well as its quality?
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