When approach indications differ, what should determine which receives greater weight?
Correct Answer
B) How applicably and reliably it measures the subject’s benefits.
Greater weight follows method applicability and evidentiary support for the benefits relevant to the property and value definition. It does not follow the highest result or equal counting. Explain why the evidence supports the conclusion, including any reasoned quantitative weighting used.
Why This Is the Correct Answer
Option B is correct because the greatest weight should be given to the approach or approaches that most reliably measure the type of benefits sought by buyers in the market for the subject. Applicability and reliability, not the size of the number, determine weight. The appraiser should explain why the evidence supports the weighting.
Why the Other Options Are Wrong
Option A: Its position as the highest numerical indication of the three.
Option A, its position as the highest numerical indication, has no connection to reliability. A high figure may result from weak data or error.
Option C: The amount of time the appraiser spent calculating the indication.
Option C, the time the appraiser spent calculating the indication, measures effort, not reliability. A lengthy calculation can still rest on poor data.
Option D: The fact that each approach was counted once in the analysis.
Option D, the fact that each approach was counted once, implies equal weights by default. Counting each approach once does not make them equally reliable.
Weight follows the buyer's lens
Give the most weight to the approach that best reflects how buyers measure the subject's benefits, with reliable data.
How to use: Use this when asked which approach should receive the most weight.
Exam Tip
Look for answers tied to applicability and reliability; reject answers based on the highest result, effort or equal counting.
Common Mistakes to Avoid
- -Weighting the highest indication most
- -Giving equal weight to each approach by default
- -Assuming more effort means a more reliable indication
Concept Deep Dive
Analysis
This question tests what decides relative weight in reconciliation. The greatest weight goes to the approach that most reliably measures the type of benefits buyers seek for the subject. Size of result, time spent and equal counting are not measures of support.
Background Knowledge
Different property types are priced by buyers in different ways, such as by comparable sales for houses or by income for investment property. The approach that best mirrors how buyers measure benefits, and has reliable data, earns the most weight. The appraiser explains that reasoning in the report.
Real-World Application
For a fully rented fourplex, investors buy on income. The appraiser gives the income approach the greatest weight because it reflects how buyers measure the property's benefits and has reliable lease data. She gives less weight to the cost approach and explains why.
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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