How should an appraiser reconcile indications when the market is unusually volatile?
Correct Answer
B) Weigh recency alongside comparability and data
Why this is correct: In volatile markets, recent sales are highly relevant, but the appraiser must still consider all traditional reconciliation criteria, including comparability (similarity to the subject) and the quality of the data itself. Why the other choices are wrong: 'Adopt the most recent indication automatically' ignores other important factors like property similarity. 'Rely only on sales from the past thirty days' may be too restrictive if those sales are not comparable. 'Widen the conclusion until it covers all figures' is not a proper reconciliation technique; the appraiser must derive a specific opinion. Exam tip: In volatile markets, give significant weight to the market conditions adjustment and support it with clear data.
Why This Is the Correct Answer
Why this is correct: In volatile markets, recent sales are highly relevant, but the appraiser must still consider all traditional reconciliation criteria, including comparability (similarity to the subject) and the quality of the data itself. Why the other choices are wrong: 'Adopt the most recent indication automatically' ignores other important factors like property similarity. 'Rely only on sales from the past thirty days' may be too restrictive if those sales are not comparable. 'Widen the conclusion until it covers all figures' is not a proper reconciliation technique; the appraiser must derive a specific opinion. Exam tip: In volatile markets, give significant weight to the market conditions adjustment and support it with clear data.
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?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam