How should an appraiser treat a value estimate found on a consumer real estate website?
Correct Answer
A) As market data requiring analysis before any use
Why this is correct: Automated valuation models (AVMs) or estimates from consumer websites are forms of market data, but they are not verified transactions or appraisal reports. An appraiser may analyze them as one data point among many, but must understand their limitations and not rely on them as authoritative evidence of value. Why the other choices are wrong: They are not comparable sales because no actual sale occurred at that price. They are not authoritative; they are often unverified algorithmic outputs. USPAP does not prohibit their consideration, but regulates their appropriate use. Exam tip: Treat AVM estimates as potentially interesting secondary data, but never as primary evidence. Your analysis must be independent.
Why This Is the Correct Answer
Why this is correct: Automated valuation models (AVMs) or estimates from consumer websites are forms of market data, but they are not verified transactions or appraisal reports. An appraiser may analyze them as one data point among many, but must understand their limitations and not rely on them as authoritative evidence of value. Why the other choices are wrong: They are not comparable sales because no actual sale occurred at that price. They are not authoritative; they are often unverified algorithmic outputs. USPAP does not prohibit their consideration, but regulates their appropriate use. Exam tip: Treat AVM estimates as potentially interesting secondary data, but never as primary evidence. Your analysis must be independent.
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