In reconciling the sales comparison approach, an appraiser has five adjusted indications. What matters most in weighing them?
Correct Answer
A) The total dollar amount of gross adjustments made
Why this is correct: The total gross adjustment amount is a primary indicator of a comparable's similarity to the subject. A sale requiring fewer and smaller adjustments is generally more reliable and should be given more weight in the reconciliation. Why the other choices are wrong: The order of inspection is irrelevant. The number of comparables alone does not determine reliability. While indications clustering around one figure can be supportive, the magnitude of adjustments is a more direct measure of comparability. Exam tip: In reconciliation, comparables with the smallest total gross adjustments are typically considered the most reliable and receive the greatest weight.
Why This Is the Correct Answer
Why this is correct: The total gross adjustment amount is a primary indicator of a comparable's similarity to the subject. A sale requiring fewer and smaller adjustments is generally more reliable and should be given more weight in the reconciliation. Why the other choices are wrong: The order of inspection is irrelevant. The number of comparables alone does not determine reliability. While indications clustering around one figure can be supportive, the magnitude of adjustments is a more direct measure of comparability. Exam tip: In reconciliation, comparables with the smallest total gross adjustments are typically considered the most reliable and receive the greatest weight.
More reconciliation Questions
An appraiser is told the property has no environmental contamination and cannot verify it. How should this be handled?
Reconciliation of the approaches to value is best described as which activity?
Significant appraisal assistance from a person who does not sign the report must be treated how?
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What does it mean to say an approach is not applicable to an assignment?
Which of the following is a written report option named in the current edition of USPAP?
What distinguishes qualitative from quantitative analysis in the sales comparison approach?
Why should the reconciliation address the quantity of evidence as well as its quality?
An appraisal report includes an addendum explaining the adjustment derivation. How does this affect compliance?
An extraordinary assumption proves false after the report is delivered. What follows?
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