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
Closely grouped indications can corroborate a conclusion, but agreement does not prove accuracy or eliminate reconciliation. Check for shared inputs or errors and explain relative reliance. Numerical closeness alone is not a sufficient reason for automatic equal averaging.
Why This Is the Correct Answer
Option B is correct because closely grouped indications such as $1.02 million, $1.05 million and $1.04 million can corroborate a conclusion. Agreement does not eliminate the need to reconcile reliability and report the approaches given the most weight. The appraiser should also check for shared inputs or errors.
Why the Other Options Are Wrong
Option A: As proof that the conclusion is beyond dispute
Option A treats the agreement as proof that the conclusion is beyond dispute. Close indications can share the same error or inputs, so agreement does not prove accuracy.
Option C: As grounds for averaging the three indications
Option C treats the agreement as grounds for averaging the three indications. Numerical closeness alone is not a reason for automatic equal averaging; weighting still needs reasoning.
Option D: As a reason to omit the reconciliation section
Option D uses the agreement as a reason to omit the reconciliation section. Reconciliation is still required to explain the reliability of each approach and the final opinion.
Agreement supports, doesn't prove
Three witnesses telling the same story help, but you still check whether they all heard it from the same source.
How to use: Use this when indications are close and an option claims the work is done.
Exam Tip
Close indications call for corroboration language plus explained weighting. Options claiming proof or skipping reconciliation are wrong.
Common Mistakes to Avoid
- -Treating close indications as proof of value
- -Averaging close indications without reasoning
- -Skipping reconciliation when results agree
Concept Deep Dive
Analysis
This question tests how to treat closely grouped indications. Agreement among approaches can corroborate a conclusion, but it does not prove accuracy or replace reconciliation. The appraiser still explains the relative reliance on each approach.
Background Knowledge
When indications fall close together, the appraiser gains confidence but still evaluates each approach's reliability. Approaches can share inputs such as the same market data, which can make them agree without being independent confirmation.
Real-World Application
An appraiser's three approaches fall within $30,000 on a $1 million home. She notes the agreement as support but still explains that sales comparison received the most weight because of its recent, close comparables.
More Reconciliation Questions
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