In a market with few sales, an appraiser considers a sale from a competing neighborhood. Using it requires:
Correct Answer
D) A supported location adjustment and an explanation
Why this is correct: When using a sale from a competing neighborhood due to lack of local data, the appraiser must account for the locational difference. This requires a supported adjustment based on market evidence and a clear explanation in the report for the intended user. Why the other choices are wrong: The sale can be included in the reconciliation. Neighborhoods are not interchangeable without analysis. The client's written approval is not a USPAP requirement for this analytical decision. Exam tip: When you go outside the subject's neighborhood, you must measure and explain the location difference.
Why This Is the Correct Answer
Why this is correct: When using a sale from a competing neighborhood due to lack of local data, the appraiser must account for the locational difference. This requires a supported adjustment based on market evidence and a clear explanation in the report for the intended user. Why the other choices are wrong: The sale can be included in the reconciliation. Neighborhoods are not interchangeable without analysis. The client's written approval is not a USPAP requirement for this analytical decision. Exam tip: When you go outside the subject's neighborhood, you must measure and explain the location difference.
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