Only one approach could be credibly developed for an assignment. What does reconciliation involve then?
Correct Answer
C) Judging whether that single indication is credible
A single approach can support an appraisal when appropriate to the assignment, permitted by applicable requirements, and supported by sufficient scope and data. Explain exclusions of other approaches. A method count alone does not establish credibility, and some lending programs impose additional approach requirements.
Why This Is the Correct Answer
Option C is correct because credible results require support by relevant evidence and logic to the degree necessary for the intended use. With one indication, reconciliation focuses on whether that indication is adequately supported. The appraiser also explains why the other approaches were not developed.
Why the Other Options Are Wrong
Option A: Nothing, since a single indication needs no weighing
Option A says reconciliation involves nothing, since a single indication needs no weighing. Even without weighing, the appraiser must still judge whether that one indication is credible for the intended use.
Option B: Averaging that indication with the client's estimate
Option B averages the single indication with the client's estimate. A client's estimate is not market evidence developed by the appraiser, and blending it in compromises independent analysis.
Option D: Developing a second approach despite the lack of data
Option D develops a second approach despite the lack of data. An approach built without adequate data does not produce a credible indication and adds nothing reliable to weigh.
One indication, still tested
Even a lone indication must pass the credibility test before it becomes the value opinion.
How to use: Use this when a question says only one approach could be developed.
Exam Tip
Reject answers claiming reconciliation is unnecessary; with one approach, reconciliation shifts to judging credibility.
Common Mistakes to Avoid
- -Assuming reconciliation is skipped when there is only one indication
- -Forcing an unsupported second approach
- -Blending the appraiser's indication with a client's estimate
Concept Deep Dive
Analysis
This question tests what reconciliation means when only one approach can be credibly developed. There is nothing to weigh against, but the appraiser still must judge whether that single indication is credible for the intended use. A single approach can support an appraisal when appropriate and supported by sufficient data, with exclusions of other approaches explained.
Background Knowledge
Reconciliation includes evaluating the quality of the evidence, not only weighing multiple indications. When one approach is appropriate and supported, it can stand alone, subject to the assignment's requirements. Some lending programs impose additional approach requirements that the appraiser must consider.
Real-World Application
An appraiser values vacant land where only sales comparison applies. The appraiser reviews the comparables' similarity and verification to confirm the indication is reliable. The report explains why cost and income approaches were not developed.
More Reconciliation Questions
In a cost approach for an improved property, an appraiser estimates site value by sales comparison, allocation and extraction, then settles on one site-value figure before final reconciliation. How is this step best described?
An extraordinary assumption was reasonably supported, properly used and disclosed in an appraisal report. Later, the assumed information is found to be false. Which conclusion is best supported?
An otherwise applicable valuation approach cannot be developed reliably from the available data. The remaining scope can produce credible assignment results. What should the appraiser do?
May an appraiser use a hypothetical condition in any assignment?
An appraisal has a current effective date and permits an extraordinary assumption if its requirements are met. Which situation involves uncertain information rather than a fact known to be contrary to reality on that date?
Why must a report identify any real property interest that is being excluded from the value opinion?
Which review best helps explain divergent cost, sales-comparison and income indications?
Two value indications are $340,000 and $392,000. What is the difference as a percentage of the lower indication, rounded to one decimal place?
An unauthorized third party requests a lender-client’s report. No due-process or other permitted disclosure exception applies. How should the appraiser respond?
An appraiser proposes to assume there are no hidden defects. Which fact would characterize that assumption as extraordinary under the USPAP 2024 definition, rather than justify dismissing it as routine boilerplate?
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