A material subject feature lacks a matching comparable and the current research does not support its contribution. What should the appraiser do next?
Correct Answer
D) Seek applicable support, reassess credible completion and disclose material limitations
Investigate suitable evidence and applicable methods for the relevant characteristic, evaluate whether the assignment can be completed credibly and report material limitations accurately. Lack of a matched sale does not prove zero contribution. National tables require applicability support. Merely disclosing unsupported analysis does not make it credible; if adequate support cannot be obtained, reconsider scope or completion.
Why This Is the Correct Answer
Option D is correct because credible assignment results require support by relevant evidence and logic. When research does not yet support a material feature's contribution, the appraiser should seek applicable evidence and methods, reassess whether the assignment can be completed credibly and report material limitations accurately. If adequate support cannot be found, the scope of work or the ability to complete the assignment must be reconsidered.
Why the Other Options Are Wrong
Option A: Apply a published national feature-contribution table, adjusted by a regional cost index
Option A applies a published national feature-contribution table adjusted by a regional cost index. A national table, even with a cost index, is not market support for this feature in this market unless its applicability is shown, and cost indexes measure cost rather than market contribution.
Option B: Assign zero contribution to the feature, since evidence is missing
Option B assigns zero contribution to the feature because evidence is missing. A lack of matched sales does not prove the feature adds nothing; treating missing evidence as a zero value is itself an unsupported conclusion.
Option C: Assume disclosure alone makes any chosen contribution credible
Option C assumes disclosure alone makes any chosen contribution credible. Disclosing a limitation is important, but it does not turn an unsupported number into a credible one; the analysis still needs relevant evidence and logic.
Search, judge, disclose
When support is missing: first search for more evidence, then judge whether credible results are still possible, then disclose material limitations. Disclosure comes last, not instead of the first two steps.
How to use: Use this sequence to pick the answer that keeps credibility as the test rather than a shortcut.
Exam Tip
Be wary of answers that treat missing evidence as proof of a specific value, including zero. The better answer usually combines further research with an honest assessment of credibility.
Common Mistakes to Avoid
- -Treating a feature as worth zero just because no matched sale exists
- -Plugging in a national cost or contribution table without showing it fits the market
- -Believing a disclosure statement fixes an unsupported adjustment
Concept Deep Dive
Analysis
This question tests what an appraiser should do when a material feature cannot yet be supported by the available research. Credible results require support by relevant evidence and logic, so the appraiser should look for applicable support, decide whether the assignment can still be completed credibly and disclose any material limitations. Shortcuts such as assuming zero, borrowing an unsupported table or relying on disclosure alone do not create credibility.
Background Knowledge
USPAP requires that assignment results be credible, meaning worthy of belief and supported by relevant evidence and logic for the intended use. When data are thin, appraisers may widen the search to competing areas, older sales, other methods such as cost or statistical analysis, or interviews with market participants. If support still cannot be obtained, the appraiser must address the scope of work or whether the assignment can be completed.
Real-World Application
A rural subject has a large equestrian barn and arena, and no recent comparable sales include similar facilities. The appraiser expands the search to a wider competing area, interviews local brokers and considers a depreciated cost estimate as a cross-check. The report explains the support found and the remaining limitations, and the appraiser confirms the results are still credible for the lender's intended use.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
Which of these is listed by Fannie Mae as a sales or financing concession?
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Previous Question
Market evidence indicates an otherwise matched installed feature has no material positive or negative effect on sale price. It cost thousands to install. What supports no adjustment for that feature?
Next Question
A comparable has a cash-equivalent sale price of $680,000. The subject and comparable have the same rights and relevant characteristics except for one permanent real-property feature. Verified market evidence supports a $67,000 contributory difference: the subject has the feature and the comparable lacks it. Adjust only the comparable toward the subject. What is its adjusted price?