The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
Correct Answer
A) Re-examine the outlier's data and reasoning
Why this is correct: When one value indication ($610,000) is an outlier compared to the others ($480,000, $495,000), the appraiser should first re-examine that outlier's data and reasoning. The divergence signals a potential error, misapplication, or unique factor that must be understood before forming a final opinion. Why the other choices are wrong: Averaging all three into a single conclusion would incorporate a potentially flawed indication. Discarding the outlier and averaging the other two is arbitrary without diagnosing the cause. Reporting the range without any point value avoids the reconciliation duty. Exam tip: An outlier is a clue; investigate it before deciding its weight.
Why This Is the Correct Answer
Why this is correct: When one value indication ($610,000) is an outlier compared to the others ($480,000, $495,000), the appraiser should first re-examine that outlier's data and reasoning. The divergence signals a potential error, misapplication, or unique factor that must be understood before forming a final opinion. Why the other choices are wrong: Averaging all three into a single conclusion would incorporate a potentially flawed indication. Discarding the outlier and averaging the other two is arbitrary without diagnosing the cause. Reporting the range without any point value avoids the reconciliation duty. Exam tip: An outlier is a clue; investigate it before deciding its weight.
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