The most appropriate unit of comparison is determined by:
Correct Answer
B) The unit the market's participants actually use in that segment
Why this is correct: The unit of comparison should mirror how market participants in that segment evaluate properties (e.g., price per square foot for condos, whole price for homes). Why the other choices are wrong: The unit that produces the narrowest range of indications may be misleading if not market-based. The unit required by the lender's appraisal review software is not a valuation basis. The unit that yields the highest indicated value for the subject is unethical. Exam tip: Choose units based on market behavior, not computational convenience.
Why This Is the Correct Answer
Why this is correct: The unit of comparison should mirror how market participants in that segment evaluate properties (e.g., price per square foot for condos, whole price for homes). Why the other choices are wrong: The unit that produces the narrowest range of indications may be misleading if not market-based. The unit required by the lender's appraisal review software is not a valuation basis. The unit that yields the highest indicated value for the subject is unethical. Exam tip: Choose units based on market behavior, not computational convenience.
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Excess land differs from surplus land in that excess land:
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Previous Question
A paired sales analysis yields an adjustment of −$15,000 for a property located on a busy arterial street. Later, the appraiser discovers that all three paired properties with arterial exposure also had 20% smaller lots than their non-arterial counterparts — a difference not initially controlled for. What is the most appropriate action per USPAP?
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A comparable sold to a tenant already occupying the property. This transaction may require: