Six land sales produce indications from $88,000 to $96,000. How should the appraiser conclude?
Correct Answer
A) Select a figure supported by the strongest sales
Why this is correct: Even with a narrow range, the appraiser must exercise judgment to select a point estimate supported by the sales most comparable to the subject in key attributes like location, size, zoning, and transaction terms. Why the other choices are wrong: 'Take the arithmetic mean of all six indications' is mechanistic and may give equal weight to less comparable sales. 'Adopt the lowest figure to remain conservative' violates the requirement for impartiality; appraisers must not be arbitrarily conservative or optimistic. 'Report the full range without any conclusion' may be insufficient if the assignment requires a defined value opinion. Exam tip: A narrow range doesn't eliminate the need for judgment. Support your selected figure with the best comparables.
Why This Is the Correct Answer
Why this is correct: Even with a narrow range, the appraiser must exercise judgment to select a point estimate supported by the sales most comparable to the subject in key attributes like location, size, zoning, and transaction terms. Why the other choices are wrong: 'Take the arithmetic mean of all six indications' is mechanistic and may give equal weight to less comparable sales. 'Adopt the lowest figure to remain conservative' violates the requirement for impartiality; appraisers must not be arbitrarily conservative or optimistic. 'Report the full range without any conclusion' may be insufficient if the assignment requires a defined value opinion. Exam tip: A narrow range doesn't eliminate the need for judgment. Support your selected figure with the best comparables.
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