Two otherwise identical homes sold three weeks apart: Property X (with a corner lot) sold for $372,000; Property Y (interior lot) sold for $360,000. The appraiser adjusts Property Y upward by $12,000 to reflect the corner lot premium when reconciling to the subject, which also has a corner lot. Which statement best describes the flaw in this reasoning?
Correct Answer
C) The $12,000 difference may reflect time, financing, or negotiation effects — not solely the corner lot — and requires verification that no other differences exist.
Per USPAP Standards Rule 1-4(b), adjustments must be supported by market data and reflect only the influence of the specific characteristic being analyzed. A three-week interval introduces potential time-related value change; without confirming market stability or adjusting for time, the $12,000 differential cannot be conclusively attributed to the corner lot. Option C correctly identifies the need to isolate the feature’s influence — a core requirement of valid paired analysis. Option D is incorrect: USPAP does not prescribe a maximum number of days; it requires the appraiser to consider and address time influence (Standards Rule 1-5).
Why This Is the Correct Answer
Per USPAP Standards Rule 1-4(b), adjustments must be supported by market data and reflect only the influence of the specific characteristic being analyzed. A three-week interval introduces potential time-related value change; without confirming market stability or adjusting for time, the $12,000 differential cannot be conclusively attributed to the corner lot. Option C correctly identifies the need to isolate the feature’s influence — a core requirement of valid paired analysis. Option D is incorrect: USPAP does not prescribe a maximum number of days; it requires the appraiser to consider and address time influence (Standards Rule 1-5).
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