Two data sources report different sale prices for the same transaction. What should the appraiser do?
Correct Answer
D) Resolve the conflict by verifying the transaction
Why this is correct: Discrepancies in sale prices must be resolved by verification (e.g., reviewing the deed, contacting a party) to determine the accurate, market-supported price. Using unverified or conflicting data undermines the reliability of the analysis. Why the other choices are wrong: 'Use whichever price supports the value conclusion' is unethical and violates USPAP's requirement for objectivity. 'Average the two figures into a single sale price' creates a fictional transaction price not supported by the market. 'Exclude the sale from the analysis altogether' may be appropriate only after verification reveals it is non-market or unreliable; exclusion should not be the first step. Exam tip: Never average conflicting data. Always seek primary source verification to resolve discrepancies.
Why This Is the Correct Answer
A conflict means one source is wrong without indicating which, so the appraiser verifies the transaction with a party having direct knowledge and reports the verification.
Why the Other Options Are Wrong
Option A: Use whichever price supports the value conclusion
Selecting the figure that supports the conclusion breaches the obligation of impartiality and selects evidence to fit a result.
Option B: Average the two figures into a single sale price
Averaging produces a price at which no transaction occurred and that neither source reports.
Option C: Exclude the sale from the analysis altogether
Excluding the sale discards useful evidence that verification would usually recover.
Verify, Do Not Choose
Verify, Do Not Choose. One of them is wrong, and picking the convenient one is the worst possible method.
How to use: Go to a party with direct knowledge or to the closing documents. A phone call usually settles it.
Exam Tip
Report how the price was verified. That description is what lets a reader weigh the data.
Common Mistakes to Avoid
- -Choosing the figure that fits the conclusion
- -Averaging conflicting reports
- -Excluding rather than verifying
Concept Deep Dive
Analysis
Conflicting reports of the same sale price mean one source is wrong, and the appraiser cannot tell which from the conflict alone. USPAP requires that data used be appropriate and verified, so the response is to resolve the discrepancy by verifying the transaction with a party who has direct knowledge — an agent to the sale, the buyer or seller, the closing statement, or the recorded deed and transfer tax record. Verification usually settles it quickly, and the appraiser then reports the price used and how it was verified so a reader can assess the evidence. The distractors each represent a way of avoiding the work. Choosing whichever figure supports the conclusion is the clearest ethics breach available in a data question, since it selects evidence to fit a predetermined result. Averaging produces a figure neither source reports and that no transaction occurred at. And excluding the sale discards useful evidence a phone call would have secured.
Background Knowledge
USPAP requires appraisers to use appropriate data and to verify it. Conflicting price reports are resolved by verification with parties having direct knowledge, closing documents or recorded transfer records, with the verification reported.
Real-World Application
An appraisal finding two reported prices confirms the correct figure with the listing agent and the recorded transfer tax, and states the verification in the report.
More Statistics Questions
A set of comparable sales has a mean of $250,000 and a standard deviation of $20,000. What is the coefficient of variation?
A property sold for $400,000 and resold three years later for $463,050 with no physical change. What compound annual rate does this indicate?
A histogram of neighborhood sale prices shows two distinct peaks. What does this most likely mean?
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In a market study, what does a frequency distribution of sale prices show?
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