What does it mean to say an approach is not applicable to an assignment?
Correct Answer
B) The data needed to apply it credibly is absent
Why this is correct: An approach is not applicable when credible data to develop it is unavailable or when the method is fundamentally unsuited to the property type (e.g., an income approach for a property with no rental market). Why the other choices are wrong: 'The approach produced an inconvenient figure' is not a valid reason; applicability is based on data and method, not the result. 'The client instructed that it be left out' does not override the appraiser's independent judgment about necessary analysis. 'The appraiser lacks the time to develop it' is a scope of work issue, not a determination of applicability. Exam tip: Applicability is about the ability to produce a credible result, not convenience, client preference, or schedule.
Why This Is the Correct Answer
Why this is correct: An approach is not applicable when credible data to develop it is unavailable or when the method is fundamentally unsuited to the property type (e.g., an income approach for a property with no rental market). Why the other choices are wrong: 'The approach produced an inconvenient figure' is not a valid reason; applicability is based on data and method, not the result. 'The client instructed that it be left out' does not override the appraiser's independent judgment about necessary analysis. 'The appraiser lacks the time to develop it' is a scope of work issue, not a determination of applicability. Exam tip: Applicability is about the ability to produce a credible result, not convenience, client preference, or schedule.
More Reconciliation 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?
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