Reporting GLA for a comparable from an MLS listing without verification risks:
Correct Answer
C) Carrying the listing agent's measurement error into the grid
Unverified comparable GLA can carry a source measurement error into analysis and adjustments. Identify the source, evaluate reliability and undertake verification appropriate to the assignment and materiality. Source disclosure alone does not cure inadequate necessary scope or make unsupported data credible. A specific error’s significance depends on its effect; neither an unusable conclusion nor a subject-area overstatement follows automatically.
Why This Is the Correct Answer
Option C is correct because unverified comparable GLA can carry a source measurement error into the analysis and adjustments. USPAP requires the appraiser to collect, verify and analyze all information necessary for credible assignment results. The appraiser should evaluate the reliability of the MLS figure and verify it as appropriate to the assignment.
Why the Other Options Are Wrong
Option A: Overstating the subject property's own measured square footage
Option A, overstating the subject property's own measured square footage, is wrong because the comparable's MLS data does not change the subject's own measurement, which the appraiser determines separately.
Option B: Violating the standards of practice directly
Option B, violating the standards of practice directly, is wrong because relying on a data source is not by itself a violation. The issue is whether verification appropriate to the assignment was performed, and the specific risk is carrying a measurement error into the grid.
Option D: Producing an unusable value conclusion
Option D, producing an unusable value conclusion, is wrong because an error's significance depends on its size and effect. An unverified figure creates a risk of error but does not automatically make the conclusion unusable.
Garbage in, grid out
If a wrong square footage goes into the grid, the wrong adjustment comes out.
How to use: Use this to remember why comparable data must be verified before adjustments.
Exam Tip
Choose the risk that follows directly from the facts; avoid answers claiming a broader result that does not automatically follow.
Common Mistakes to Avoid
- -Assuming disclosing the data source cures inadequate verification
- -Accepting MLS GLA without checking it against other sources
- -Assuming any unverified data makes the whole report unusable
Concept Deep Dive
Analysis
This question tests data verification for comparable sales. Using MLS-reported GLA without checking its reliability can carry the listing agent's measurement error into the sales comparison grid and the adjustments. The reasoning is to identify the direct, specific risk rather than broader outcomes that do not automatically follow.
Background Knowledge
Sales comparison relies on accurate data about comparables, including GLA, which often drives adjustments. Data sources such as MLS, public records and agent reports can differ in measurement method and accuracy. Appraisers verify data to a degree appropriate to the assignment and its materiality.
Real-World Application
An appraiser finds a comparable listed in MLS with notably more square footage than the public record shows. The appraiser checks the sketch in the listing and contacts the selling agent before deciding which figure to use and noting the source in the report.
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