Two data sources disagree about a comparable's living area. What should the appraiser do?
Correct Answer
C) Investigate the conflict and use a reasonably supported area, expanding the scope if needed.
Investigate material differences through suitable reliable sources such as sketches, measurements or knowledgeable transaction participants. Establish a reasonable basis for the area relied upon and explain material limitations as needed. Selecting the value-favorable number or averaging without support does not resolve the conflict. If adequate information cannot be obtained, reconsider the comparable, scope or permissible assumptions rather than inventing certainty.
Why This Is the Correct Answer
Option C is correct because the appraiser should investigate a material conflict through reliable sources such as sketches, measurements or knowledgeable transaction participants, and rely on a reasonably supported area. USPAP allows the appraiser to modify assignment conditions to expand the scope to gather needed information, or to use an extraordinary assumption if credible results can still be developed.
Why the Other Options Are Wrong
Option A: Adopt the larger area without verification to avoid understating value.
Option A is wrong because adopting the larger area without verification to avoid understating value picks a figure for its effect on value rather than its accuracy. That does not resolve the conflict and introduces bias.
Option B: Use an unsupported simple average of the conflicting figures.
Option B is wrong because an unsupported simple average of the conflicting figures does not establish which figure is right. Averaging hides the conflict instead of investigating it.
Option D: Discard the sale from the analysis before assessing whether the conflict can be resolved.
Option D is wrong because discarding the sale before assessing whether the conflict can be resolved skips the investigation step. The comparable may be the best evidence available once the area is verified.
Conflict means investigate
When sources disagree, dig for the truth instead of picking, averaging or tossing. Support the figure you use.
How to use: Use this when a question asks how to handle inconsistent data about a comparable or the subject.
Exam Tip
Answers that pick the value-favorable number, average without support or discard the data prematurely are typically wrong. Look for investigation and support.
Common Mistakes to Avoid
- -Choosing the larger figure because it supports a higher value
- -Averaging conflicting figures without support
- -Dropping a comparable without trying to resolve the conflict
Concept Deep Dive
Analysis
This question tests how to handle conflicting data about a comparable. The appraiser should investigate the difference using reliable sources and establish a reasonable basis for the figure used. If information cannot be obtained within the current scope, the appraiser may expand the scope or, where credible, use an extraordinary assumption.
Background Knowledge
Data sources such as MLS, public records and builder plans often report different living areas because of measurement methods or errors. Appraisers reconcile these differences by checking reliable sources and documenting the basis for the figure used.
Real-World Application
The MLS lists a comparable at 2,100 square feet while public records show 1,850. The appraiser calls the listing agent, learns that a finished basement was counted in the MLS figure, and uses the above-grade area from the records with the basement analyzed separately.
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