What does bracketing the subject with comparable sales accomplish?
Correct Answer
D) It sets market-derived limits above and below
Why this is correct: As the original explanation states, bracketing means selecting comparables both superior and inferior to the subject. This establishes market-derived limits: the inferior sales set a floor, the superior sales set a ceiling, indicating the subject's value should lie between them. Why the other choices are wrong: It reduces the number of adjustments required is not necessarily true; adjustments are still needed for differences. It proves the value conclusion is mathematically right overstates its role; bracketing supports but doesn't prove correctness. It satisfies a specific requirement of Standard 1 is incorrect; USPAP doesn't explicitly require bracketing, though it's a best practice. Exam tip: Bracketing provides a reasonableness check. If your adjusted values don't bracket the subject, re-examine your adjustments or comparables.
Why This Is the Correct Answer
Why this is correct: As the original explanation states, bracketing means selecting comparables both superior and inferior to the subject. This establishes market-derived limits: the inferior sales set a floor, the superior sales set a ceiling, indicating the subject's value should lie between them. Why the other choices are wrong: It reduces the number of adjustments required is not necessarily true; adjustments are still needed for differences. It proves the value conclusion is mathematically right overstates its role; bracketing supports but doesn't prove correctness. It satisfies a specific requirement of Standard 1 is incorrect; USPAP doesn't explicitly require bracketing, though it's a best practice. Exam tip: Bracketing provides a reasonableness check. If your adjusted values don't bracket the subject, re-examine your adjustments or comparables.
More Sales Comparison Questions
Reconciliation of the approaches to value is best described as which activity?
Why should the reconciliation address the quantity of evidence as well as its quality?
How long must a report be retained compared with the workfile?
What distinguishes an appraisal review from an appraisal?
An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
What should the reconciliation section explain to the reader?
How do the content obligations of the two report options differ with respect to the information analyzed?
The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam