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.
More Emerging Methods Questions
How does an alternative inspection method affect the appraiser's disclosure obligations?
A collector's photographs show a condition the appraiser believes needs specialist assessment. What is the appropriate step?
What responsibility does an appraiser retain for an error originating in a third-party database?
Under current USPAP guidance, what is the output of an automated valuation model before an appraiser analyzes it?
Which assignment type still requires the appraiser to develop an opinion of value?
A model returns an estimate far from the appraiser's own conclusion. What is the appropriate response?
What does it mean that a tool cannot comply with USPAP?
An appraiser is asked to review an assignment where an AVM supplied the value. What does the review examine?
Why is the date a data extract was pulled worth recording in the workfile?
A desktop appraisal is best described as an assignment completed how?
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