Comparable-sales evidence is limited. What should guide reconciliation with other applicable approaches?
Correct Answer
A) Weigh the adequacy and reliability of all evidence and explain the weights.
Limited sales evidence calls for assessing its quality, relevance and adequacy alongside the other applicable approaches. There is no automatic preference based only on method names. If the overall scope cannot support credible results, additional work or a change in the assignment is needed.
Why This Is the Correct Answer
Option A is correct because limited sales evidence calls for weighing the adequacy and reliability of all applicable evidence and explaining the resulting weights. USPAP calls for reconciling the quality and quantity of data and the applicability and relevance of the approaches used. If the overall scope cannot support credible results, additional work or a change in the assignment is needed.
Why the Other Options Are Wrong
Option B: Give the sales comparison approach all of the weight.
Option B, giving the sales comparison approach all of the weight, is wrong because the facts say sales evidence is limited. Putting all reliance on the weakest-supported approach ignores the other applicable evidence.
Option C: Average all indications equally to compensate for the missing data.
Option C, averaging all indications equally to compensate for missing data, is wrong because averaging does not fix weak data. It gives the same influence to indications that may have very different support.
Option D: Ignore the other approaches whenever any comparable sale is available.
Option D, ignoring the other approaches whenever any comparable sale is available, is wrong because the existence of one sale does not make it adequate. Other applicable approaches may be better supported in this situation.
Thin data, wider look
When sales data are thin, weigh all applicable evidence and explain how much each deserves.
How to use: Use this when a question says comparable-sales evidence is limited.
Exam Tip
Look for the answer that weighs all evidence and explains the weights. Answers that assign all weight by method name or average to make up for gaps are distractors.
Common Mistakes to Avoid
- -Giving all weight to sales comparison despite thin data
- -Averaging to make up for missing data
- -Ignoring other approaches when any sale exists
Concept Deep Dive
Analysis
This question tests how to reconcile when comparable-sales evidence is limited. The appraiser should assess the quality and adequacy of the sales evidence alongside the other applicable approaches and explain the weights. No approach automatically controls just because of its name.
Background Knowledge
Reconciliation is driven by data quality, data quantity and applicability. When one approach has thin data, other applicable approaches may carry more weight, and the appraiser must explain the reasoning so intended users can follow it.
Real-World Application
An appraiser valuing a unique custom home in a rural area finds only two distant sales. The appraiser develops a carefully supported cost approach, weighs it with the limited sales evidence, and explains in the report why each received its weight.
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