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) Assess reliability and explain a supported amount near the cluster
A close cluster is evidence to investigate and reconcile, not an automatic command to select its median or a particular precision. Compare verification, applicability and uncertainty, then explain a supported contribution estimate or range. Exact agreement of the three indications is unnecessary.
Why This Is the Correct Answer
Option A is correct because the appraiser should assess the reliability of each indication, considering verification and applicability, and then explain a supported amount near the $9,000 to $10,200 cluster. Close agreement among independent pairs strengthens the support. Exact agreement is not required.
Why the Other Options Are Wrong
Option B: Discard the indications that are not identical to each other
Option B is wrong because it discards the indications that are not identical to each other. Market data rarely produces identical results, and three close indications are useful support rather than a reason to throw data away.
Option C: Use the highest of the three amounts, $10,200, as the adjustment
Option C is wrong because it uses the highest amount, $10,200, without reason. Choosing the top of the range ignores the other two indications and the reliability analysis that should guide the choice.
Option D: Report the unrounded mean of the three, $9,566.67, as the adjustment
Option D is wrong because it reports the unrounded mean, $9,566.67, as the adjustment. A mechanical average to the cent implies precision the data does not have and skips weighing each pair's reliability.
Cluster supports, judgment selects
A tight cluster of indications shows where the answer lies; the appraiser's reasoned judgment picks and explains the amount.
How to use: Use this when a question gives several similar indications for one adjustment.
Exam Tip
Prefer answers that reconcile and explain over answers that pick the highest, require identical figures or report a cents-level average.
Common Mistakes to Avoid
- -Expecting paired sales to produce identical numbers
- -Picking the highest or lowest indication without reason
- -Reporting an average with false precision
Concept Deep Dive
Analysis
This question tests how to reconcile several paired-sales indications for one feature. Three close results form a cluster that supports an adjustment in that range, after the appraiser weighs the reliability of each pair. The indications do not need to match exactly, and no formula dictates the choice.
Background Knowledge
Adjustment rates can be developed through paired sales, statistical analysis, modeling or other accepted methods. When several indications are available, the appraiser reconciles them by considering data quality and relevance, and explains the selected amount or range.
Real-World Application
An appraiser finds three basement pairs in one subdivision indicating about $9,000 to $10,000. She notes one pair was less well verified, places less weight on it and applies a rounded adjustment within the range with a short explanation.
More Sales Comparison Questions
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Previous Question
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?
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All other price influences are controlled, and market analysis supports positive price contributions for each characteristic in which a comparable is superior to the subject. What direction applies to those comparable adjustments?