Three paired analyses of a finished basement in the same market yield $9,000, $9,500 and $10,200. The appraiser should:
Correct Answer
A) Conclude a supported rate near $9,500 from the cluster
Why this is correct: Paired data often clusters; $9,000, $9,500, and $10,200 indicate a supported rate near the middle ($9,500). Concluding a rounded figure within the cluster is appropriate. Why the other choices are wrong: Discard all three, as no two figures match one another exactly is unrealistic; market data rarely matches exactly. Use $10,200, since the market rewards the highest indication found is unsupported; the highest isn't necessarily correct. Use the exact mean of $9,567 with no rounding applied gives false precision. Exam tip: Support adjustments with a range or cluster, not a single precise number.
Why This Is the Correct Answer
Why this is correct: Paired data often clusters; $9,000, $9,500, and $10,200 indicate a supported rate near the middle ($9,500). Concluding a rounded figure within the cluster is appropriate. Why the other choices are wrong: Discard all three, as no two figures match one another exactly is unrealistic; market data rarely matches exactly. Use $10,200, since the market rewards the highest indication found is unsupported; the highest isn't necessarily correct. Use the exact mean of $9,567 with no rounding applied gives false precision. Exam tip: Support adjustments with a range or cluster, not a single precise number.
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