In reconciling, what does the appropriateness of an approach refer to?
Correct Answer
C) Whether it suits the property and intended use
Why this is correct: Appropriateness in reconciliation refers to whether the valuation approach is suitable for the specific property type and the intended use of the appraisal. It asks if the approach models how the market actually values such properties. Why the other choices are wrong: Whether the approach is commonly used locally is a factor, but not the definition of appropriateness. Whether the client has requested that approach does not make it appropriate if it doesn't suit the property. Whether the approach was developed most recently is irrelevant to its fundamental suitability. Exam tip: Appropriateness is about fit for the property and assignment purpose, not popularity or client preference.
Why This Is the Correct Answer
Why this is correct: Appropriateness in reconciliation refers to whether the valuation approach is suitable for the specific property type and the intended use of the appraisal. It asks if the approach models how the market actually values such properties. Why the other choices are wrong: Whether the approach is commonly used locally is a factor, but not the definition of appropriateness. Whether the client has requested that approach does not make it appropriate if it doesn't suit the property. Whether the approach was developed most recently is irrelevant to its fundamental suitability. Exam tip: Appropriateness is about fit for the property and assignment purpose, not popularity or client preference.
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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