How should an appraiser treat a comparable requiring a 45 percent gross adjustment when others need under 10 percent?
Correct Answer
B) Give it little weight or omit it with reason
Why this is correct: The principle of reconciliation states that comparables requiring large net adjustments are less reliable indicators of value for the subject property because each adjustment carries its own potential error. A 45% gross adjustment introduces significant uncertainty, so such a sale should be given little or no weight in the final value conclusion. Why the other choices are wrong: 'Give it equal weight, since it was adjusted' is wrong because large adjustments undermine reliability. 'Give it more weight for widening the range' is incorrect; a wider range doesn't increase reliability. 'Adjust the other sales upward to match it' is faulty logic that would distort the analysis. Exam tip: The size of adjustments is inversely related to the weight a comparable should receive.
Why This Is the Correct Answer
A 45 percent gross adjustment indicates a comparable materially different from the subject, and the accumulated estimation error in those adjustments warrants little weight or omission with the reason stated.
Why the Other Options Are Wrong
Option A: Give it equal weight, since it was adjusted
Adjustment makes numbers comparable, not properties. Heavy adjustment compounds estimation error rather than removing difference.
Option C: Give it more weight for widening the range
Widening the range with a poorly supported indication mistakes width for information.
Option D: Adjust the other sales upward to match it
Adjustments are derived from market evidence, not chosen to make sales agree with one another.
Adjusted Is Not Comparable
Adjusted Is Not Comparable. Forty-five percent of movement means the property was never much like the subject.
How to use: Look at gross adjustment alongside net. A small net can hide large offsetting adjustments in both directions.
Exam Tip
Net adjustment near zero with a large gross adjustment is the classic warning sign — the offsets conceal how different the property is.
Common Mistakes to Avoid
- -Weighting comparables equally regardless of adjustment magnitude
- -Reading net adjustment without gross
- -Adjusting other sales to reconcile the outlier
Concept Deep Dive
Analysis
Gross adjustment measures the total percentage of a sale price moved by adjustments, regardless of direction, and it is a direct indicator of comparability. A comparable needing 45 percent gross adjustment when others need under 10 percent is materially different from the subject, and every adjustment applied to it carries estimation error — so a heavily adjusted sale compounds several uncertain judgments into an indication that deserves little confidence. The appropriate treatment is to give it little weight or to omit it, explaining the reason so a reader understands the comparable set. What the appraiser must not do is treat adjustment as neutralising difference: the arithmetic makes the numbers comparable, not the properties. Nor should a poor comparable be retained for the range it adds, which mistakes width for information. And adjusting other sales to match it inverts the entire method, since adjustments are derived from market evidence rather than chosen to produce agreement.
Background Knowledge
Gross adjustment is the sum of absolute adjustments as a percentage of sale price and indicates comparability. Heavily adjusted comparables accumulate estimation error and receive less weight in reconciliation.
Real-World Application
An appraiser retains a 45 percent gross adjustment sale in the grid for bracketing but gives it minimal weight, explaining the comparability limitation.
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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