In reconciling within a single approach, the appraiser considers:
Correct Answer
B) The reliability and relevance of each indication's data
Within an approach, weigh the relevance and reliability of its data and indications. Verification, comparability and support for the analysis matter. The highest price, most recent observation alone or most convenient calculation does not automatically deserve greatest weight.
Why This Is the Correct Answer
Option B is correct because within an approach the appraiser weighs the reliability and relevance of each indication's data. USPAP refers to reconciling the quality and quantity of data analyzed within the approaches. Verification, comparability and the support for adjustments determine which indications deserve more weight.
Why the Other Options Are Wrong
Option A: Only the number of indications produced by the approach
Option A, only the number of indications produced, ignores data quality. Many weak indications do not outweigh a few strong ones simply by count.
Option C: Whichever indication is closest to the client's expectation
Option C, whichever indication is closest to the client's expectation, lets the client's view steer the result. That breaches impartiality and is not evidence of value.
Option D: The order in which the comparables were researched
Option D, the order in which the comparables were researched, has nothing to do with how comparable or reliable a sale is. Research order is an accident of workflow.
Weigh the evidence, not the count
Inside an approach, weigh how relevant and reliable each indication is, not how many there are.
How to use: Use this when a question asks how to resolve several indications within one approach.
Exam Tip
Answers with words like reliability and relevance usually describe reconciliation; answers about count, client expectation or research order do not.
Common Mistakes to Avoid
- -Weighting comparables by the order they were found
- -Assuming the most recent sale deserves the most weight regardless of other factors
- -Choosing the comparable closest to the contract or client figure
Concept Deep Dive
Analysis
This question tests reconciliation inside a single approach, such as weighing several comparables. The appraiser considers how reliable and relevant each indication's data are. Counting indications, matching client expectations or following research order do not measure support.
Background Knowledge
Within the sales comparison approach, the appraiser weighs each comparable by its similarity to the subject, the reliability of its data and the support for its adjustments. Similar logic applies within the cost and income approaches. The goal is an indication that rests on the best evidence.
Real-World Application
Of four comparables, one needed large adjustments for size and location. The appraiser gives it the least weight and relies mainly on the two most similar sales. She explains that the heavily adjusted sale is less reliable.
More Reconciliation Questions
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