Several matched pairs give adjustments of $9,000, $10,000, $11,000 and $32,000 for the same feature. What should the appraiser do?
Correct Answer
D) Examine the fourth pair before drawing a conclusion
Why this is correct: Examine the fourth pair before drawing a conclusion. The governing concept is outlier analysis. Three adjustments cluster tightly ($9k-$11k), suggesting a consistent market signal. The fourth ($32k) is an outlier that may be due to a hidden difference between those two sales. It must be investigated before being included in or excluded from the analysis. Why the other choices are wrong: Average all four to reach $15,500 as the adjustment is wrong because averaging an outlier distorts the result away from the consistent market evidence. Adopt $32,000 as the market's highest observed figure is wrong without justification; the highest figure may not be representative. Report the full range without selecting a figure avoids the necessary appraiser judgment to derive a supportable adjustment. Exam tip: Always investigate outliers in matched-pair data; don't blindly include or exclude them.
Why This Is the Correct Answer
Why this is correct: Examine the fourth pair before drawing a conclusion. The governing concept is outlier analysis. Three adjustments cluster tightly ($9k-$11k), suggesting a consistent market signal. The fourth ($32k) is an outlier that may be due to a hidden difference between those two sales. It must be investigated before being included in or excluded from the analysis. Why the other choices are wrong: Average all four to reach $15,500 as the adjustment is wrong because averaging an outlier distorts the result away from the consistent market evidence. Adopt $32,000 as the market's highest observed figure is wrong without justification; the highest figure may not be representative. Report the full range without selecting a figure avoids the necessary appraiser judgment to derive a supportable adjustment. Exam tip: Always investigate outliers in matched-pair data; don't blindly include or exclude them.
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