The appraiser’s data source reports average sale prices rather than medians. What does the Market Conditions Addendum (Form 1004MC) instruct?
Correct Answer
B) Report the available figure and identify it as an average
If data sources provide the required information as an average instead of the median, the appraiser should report the available figure and identify it as an average.
Why This Is the Correct Answer
Option B is correct because Form 1004MC instructs that if data sources provide the required information as an average instead of the median, the appraiser should report the available figure and identify it as an average. This keeps the data accurate and tells the reader what kind of statistic was used. It avoids inventing medians the data cannot support.
Why the Other Options Are Wrong
Option A: Convert the averages to medians with a standard factor
Option A, converting the averages to medians with a standard factor, is not what the form directs. No standard factor turns an average into a median, and doing so would report a figure the data does not support.
Option C: Leave the median fields blank with no comment
Option C, leaving the median fields blank with no comment, discards available information without explanation. The form instead calls for reporting the average and labeling it.
Option D: Use list prices in place of the sale price averages
Option D, using list prices in place of the sale price averages, substitutes a different statistic. List prices are not sale prices, and the form directs reporting the available sale figure identified as an average.
Report It and Label It
When the data gives an average instead of a median, report it and label it as an average.
How to use: Use 'report it and label it' when a question asks how to handle a data format that differs from what the form requests.
Exam Tip
On form-instruction questions, prefer the answer that reports available data honestly and discloses its nature over answers that convert, omit or substitute.
Common Mistakes to Avoid
- -Labeling an average as a median
- -Leaving fields blank without explanation
- -Substituting list prices for sale prices
Concept Deep Dive
Analysis
This question tests a specific Form 1004MC instruction for when data sources report averages instead of medians. The form tells the appraiser to report the available figure and identify it as an average. The point is transparency: report what the data actually shows and label it.
Background Knowledge
Form 1004MC summarizes market trends such as median sale price, days on market and sale-to-list ratios over set time periods. Data sources vary, and some report averages instead of medians. The form addresses this by having the appraiser report the available figure and identify it as an average.
Real-World Application
An appraiser's local MLS reports only average sale prices for the subject's market. On the 1004MC the appraiser enters the averages and notes that they are averages rather than medians.
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