Sensitivity analysis in the sales comparison approach tests:
Correct Answer
C) How much the conclusion moves when an adjustment rate is varied
Why this is correct: Sensitivity analysis tests how the value conclusion changes when an adjustment rate (like GLA rate) is varied within a reasonable range. It assesses the robustness of the conclusion. Why the other choices are wrong: How much the appraiser's fee changes with assignment complexity is unrelated to valuation. Whether the comparables were verified with the parties involved is part of data collection, not sensitivity. The statistical significance of the county's assessment ratios is irrelevant to sales comparison. Exam tip: Use sensitivity analysis to identify and disclose key assumptions that significantly impact value.
Why This Is the Correct Answer
Why this is correct: Sensitivity analysis tests how the value conclusion changes when an adjustment rate (like GLA rate) is varied within a reasonable range. It assesses the robustness of the conclusion. Why the other choices are wrong: How much the appraiser's fee changes with assignment complexity is unrelated to valuation. Whether the comparables were verified with the parties involved is part of data collection, not sensitivity. The statistical significance of the county's assessment ratios is irrelevant to sales comparison. Exam tip: Use sensitivity analysis to identify and disclose key assumptions that significantly impact value.
More Sales Comparison Questions
Excess land differs from surplus land in that excess land:
A paired sales analysis reveals that homes with stainless-steel appliances sell for $2,100 more than identical homes with standard appliances — but only when the homes are priced below $350,000. In the subject’s neighborhood, median sale price is $410,000. What is the appraiser’s obligation regarding the $2,100 appliance adjustment?
GLA differs by 210 sq ft between subject and comparable. Paired sales support $65 per sq ft of living area. The line adjustment is:
Paired sales are drawn from transactions six months apart in a stable market. The time adjustment needed is:
The most appropriate unit of comparison is determined by:
A comparable superior to the subject in every adjusted category should produce an indication that is:
Three sales support $520,000; the borrower's purchase contract is $505,000. May the appraisal conclude above the contract price?
A comparable sold for $300,000 with the seller carrying a loan 2 points below market, a benefit worth $8,000. What is its cash-equivalent price?
Why is a foreclosure sale generally a poor comparable in a stable market?
A comparable sold 8 months ago for $250,000 in a market appreciating 6% per year. What is the time-adjusted price?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam