A sales-comparison indication depends heavily on one sale. What should the appraiser review during reconciliation?
Correct Answer
A) Whether that sale and the remaining evidence adequately support the indication.
Heavy reliance on one observation makes its verification, comparability and supporting context important. Review quality and quantity rather than assuming a universal minimum or automatically rejecting the method. Remove unsupported numerical thresholds and explain whether the available evidence is adequate.
Why This Is the Correct Answer
Option A is correct because reconciliation requires the appraiser to judge whether the evidence, both the key sale and the rest of the data, adequately supports the indication. Credible results need support by relevant evidence and logic to the degree necessary for the intended use. Heavy reliance on one sale makes its verification and comparability especially important, and the appraiser should explain whether the overall evidence is sufficient.
Why the Other Options Are Wrong
Option B: Whether a ten-sale minimum invalidates the approach.
Option B is wrong because there is no universal ten-sale minimum that invalidates the sales comparison approach. The appraiser reviews whether the quality and quantity of the available evidence are adequate, not whether an arbitrary count has been reached.
Option C: Whether relying on one sale makes verification unnecessary.
Option C is wrong because relying on one sale makes verification more important, not unnecessary. When a single observation drives the indication, an error in that sale would carry straight into the value conclusion.
Option D: Whether averaging with cost removes the need to examine the sales evidence.
Option D is wrong because averaging with the cost indication does not remove the need to examine the sales evidence. Reconciliation weighs the reliability of each indication; blending numbers does not cure weak or unverified sales data.
One sale, double check
The fewer the sales carrying the weight, the harder each one must be checked. One key sale means double-checking its verification and comparability.
How to use: Use this when a question describes an indication driven by one or two comparables.
Exam Tip
When an answer choice cites a fixed minimum number of sales or says checking is unnecessary, compare it with an option that asks whether the evidence is adequate. Adequacy of support is the usual reconciliation test.
Common Mistakes to Avoid
- -Assuming a fixed minimum number of sales is required for the approach to be valid
- -Skipping verification because only one sale is being relied on
- -Averaging with another approach instead of evaluating the sales evidence
Concept Deep Dive
Analysis
This question tests how an appraiser handles a sales-comparison indication that leans heavily on a single sale. The reasoning turns on the quality and quantity of evidence: when one observation carries most of the weight, its verification, comparability and the support from the remaining data become critical. Look for the answer that asks whether the evidence is adequate rather than one that applies an invented threshold or excuses the appraiser from checking.
Background Knowledge
Reconciliation considers both the quality and the quantity of the data within each approach and the applicability of each approach. USPAP requires assignment results to be supported by relevant evidence and logic to the degree necessary for the intended use. A conclusion that rests mainly on one sale can be credible, but only if that sale is well verified and consistent with the other evidence.
Real-World Application
An appraiser values a rural home where only one truly similar sale closed in the past year, and the adjusted grid leans heavily on it. In reconciliation, the appraiser confirms the sale terms with the listing agent, checks that the other, less similar sales bracket the result, and explains in the report why the evidence supports the conclusion.
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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What is the final test an appraiser should apply to a reconciled value conclusion?
Next Question
Within the sales comparison approach, Sale A has adjustments of +$38,000 and -$34,000 (net +$4,000, gross $72,000). Sale B has adjustments of +$9,000 and +$6,000 (net +$15,000, gross $15,000). Both sold for about $400,000 and are equally well verified. Which sale should generally receive more weight?