Three matched pairs isolate a swimming pool at $10,500, $11,000 and $18,000. How should the appraiser proceed?
Correct Answer
C) Investigate the differing indication and reconcile according to the evidence
Investigate why one paired indication differs and evaluate all three for verification, segment relevance and controlled influences. The two clustered amounts are not automatically more reliable, nor is the highest automatically most current. Reconcile only after assessing support.
Why This Is the Correct Answer
Option C is correct because the appraiser should examine and reconcile all value indicators. Investigating why the $18,000 pair differs, such as verification problems, a different market segment or an uncontrolled difference, lets the appraiser weigh each pair on its reliability before settling on a pool adjustment.
Why the Other Options Are Wrong
Option A: Use the two clustered amounts and drop the third without investigation
Option A uses the two clustered amounts and drops the third without investigation. Clustered figures are not automatically more reliable, and discarding data without examining it skips the analysis needed to support the adjustment.
Option B: Use the highest of the three amounts as the pool adjustment
Option B uses the highest amount, $18,000, as the pool adjustment. Picking the highest figure without investigation has no support; the highest pair is not automatically the most current or most reliable.
Option D: Abandon all three indications because they are not identical
Option D abandons all three indications because they are not identical. Paired sales seldom match exactly; differences call for investigation and reconciliation, not discarding the evidence.
Outlier means investigate
When one pair stands apart, ask why before deciding how much weight it gets. Do not delete it, crown it or quit.
How to use: Use this when answer choices offer a mechanical way to handle a differing data point.
Exam Tip
Look for the answer that combines investigation with reconciliation; mechanical shortcuts such as dropping, maximizing or abandoning data lack support.
Common Mistakes to Avoid
- -Throwing out an outlier without checking why it differs
- -Choosing the highest or lowest indication without support
- -Rejecting paired data because indications are not identical
Concept Deep Dive
Analysis
This question tests how to handle paired-sales indications that disagree. Two pairs suggest about $10,500 to $11,000 for a pool, while a third suggests $18,000. The correct reasoning is to examine all indications, investigate why one differs, and reconcile based on the evidence rather than discarding or favoring data mechanically.
Background Knowledge
Paired data analysis compares sales that differ mainly in one feature to isolate that feature's contribution. Because real sales are rarely perfectly matched, indications often vary. The appraiser investigates outliers and reconciles the indications based on the quality of each pair.
Real-World Application
An appraiser's third pool pair shows $18,000, and a call to the listing agent reveals the higher-priced home also had a newly renovated kitchen. The appraiser gives that pair little weight and supports a pool adjustment near the other two indications.
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?
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