Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
Correct Answer
B) As corroboration, with weighting still explained
Why this is correct: Close agreement among value indications from different approaches provides corroboration and strengthens confidence in the conclusion. However, the appraiser must still explain the reasoning and weighting given to each approach, as the indications could share a common error. Why the other choices are wrong: "As proof that the conclusion is beyond dispute" is wrong; appraisal is an opinion, not proof, and agreement does not guarantee accuracy. "As grounds for averaging the three indications" is wrong; value is a reasoned conclusion, not a mechanical average. "As a reason to omit the reconciliation section" is wrong; reconciliation and explanation are always required. Exam tip: Reconciliation requires explanation, not just averaging, even when indications are close.
Why This Is the Correct Answer
Why this is correct: Close agreement among value indications from different approaches provides corroboration and strengthens confidence in the conclusion. However, the appraiser must still explain the reasoning and weighting given to each approach, as the indications could share a common error. Why the other choices are wrong: "As proof that the conclusion is beyond dispute" is wrong; appraisal is an opinion, not proof, and agreement does not guarantee accuracy. "As grounds for averaging the three indications" is wrong; value is a reasoned conclusion, not a mechanical average. "As a reason to omit the reconciliation section" is wrong; reconciliation and explanation are always required. Exam tip: Reconciliation requires explanation, not just averaging, even when indications are close.
More reconciliation Questions
An appraiser is told the property has no environmental contamination and cannot verify it. How should this be handled?
Reconciliation of the approaches to value is best described as which activity?
Significant appraisal assistance from a person who does not sign the report must be treated how?
In appraising a hotel as a going concern, what must be allocated?
What does it mean to say an approach is not applicable to an assignment?
Which of the following is a written report option named in the current edition of USPAP?
What distinguishes qualitative from quantitative analysis in the sales comparison approach?
Why should the reconciliation address the quantity of evidence as well as its quality?
An appraisal report includes an addendum explaining the adjustment derivation. How does this affect compliance?
An extraordinary assumption proves false after the report is delivered. What follows?
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