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 outlier and lean on the clustered pair values
Why this is correct: In paired-data analysis, when one value is an outlier, the appraiser must investigate why (e.g., were the sales truly comparable?). The clustered values ($10,500-$11,000) are likely more reliable indicators. Why the other choices are wrong: Averaging the three gives undue weight to the outlier. Adopting the highest figure without justification is unsupported. Abandoning the adjustment is premature if two pairs provide reasonable support. Exam tip: Look for clusters in paired data, not just the arithmetic mean. Investigate outliers.
Why This Is the Correct Answer
Why this is correct: In paired-data analysis, when one value is an outlier, the appraiser must investigate why (e.g., were the sales truly comparable?). The clustered values ($10,500-$11,000) are likely more reliable indicators. Why the other choices are wrong: Averaging the three gives undue weight to the outlier. Adopting the highest figure without justification is unsupported. Abandoning the adjustment is premature if two pairs provide reasonable support. Exam tip: Look for clusters in paired data, not just the arithmetic mean. Investigate outliers.
More Sales Comparison Questions
Excess land differs from surplus land in that excess land:
A paired sales analysis reveals that homes with stainless-steel appliances sell for $2,100 more than identical homes with standard appliances — but only when the homes are priced below $350,000. In the subject’s neighborhood, median sale price is $410,000. What is the appraiser’s obligation regarding the $2,100 appliance adjustment?
GLA differs by 210 sq ft between subject and comparable. Paired sales support $65 per sq ft of living area. The line adjustment is:
Paired sales are drawn from transactions six months apart in a stable market. The time adjustment needed is:
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