What is the risk of accepting a model estimate because it agrees with the client's expectation?
Correct Answer
C) The appraiser let the outcome select the evidence
Selecting or favoring an estimate because it meets a desired outcome substitutes the desired result for evidence-based analysis and compromises impartiality. Evaluate model applicability, data, and support independently of the client’s target. Numerical agreement alone proves neither error nor correctness and does not change a confidence score automatically. Whether client-provided information is confidential is a separate question under the applicable confidentiality requirements.
Why This Is the Correct Answer
Option C is correct because accepting a model estimate for agreeing with the client's expectation means the appraiser has let the outcome select the evidence. That substitutes a desired result for evidence-based analysis and conflicts with the USPAP requirement not to perform an assignment with bias. The model should be judged on its applicability, data and support.
Why the Other Options Are Wrong
Option A: The model may lose its published confidence score
Option A is wrong because it says the model may lose its published confidence score. Numerical agreement with a client's expectation does not change a model's confidence score, and that is not the risk being tested.
Option B: Agreement by itself indicates a modelling error
Option B is wrong because it says agreement by itself indicates a modelling error. Agreement alone proves neither error nor correctness; the problem is relying on agreement as the reason to accept the estimate.
Option D: Client expectations are confidential information
Option D is wrong because it raises client expectations being confidential information. Confidentiality is a separate question and does not describe the risk of letting a desired outcome drive the analysis.
Evidence first, answer second
Let the evidence lead you to the value, do not let the hoped-for value pick the evidence. If agreement is your only reason, you have reversed the order.
How to use: Use this when a question describes accepting data because it matches what someone wants.
Exam Tip
When a choice of evidence is driven by a client's target, think bias and impartiality.
Common Mistakes to Avoid
- -Treating agreement with a client's figure as confirmation of accuracy
- -Assuming agreement with expectations signals a model error
- -Confusing bias concerns with confidentiality rules
Concept Deep Dive
Analysis
This question tests the bias risk in favoring evidence that matches a desired result. Choosing a model estimate because it agrees with the client's expectation lets the outcome drive the evidence, which compromises impartiality. The appraiser should evaluate the model on its applicability, data and support, independent of any target.
Background Knowledge
USPAP's Ethics Rule requires appraisers to perform assignments with impartiality and without bias. Selecting data or estimates because they support a predetermined or desired value undermines credibility.
Real-World Application
A loan officer mentions the borrower needs a value near a certain figure, and one AVM happens to report that number. The appraiser sets that fact aside, tests the AVM against local sales, and bases the opinion on supported evidence.
More Emerging Methods Questions
A loan is eligible for Fannie Mae's value acceptance + property data option, and the lender elects that option. What does the lender obtain in place of an appraisal?
An appraiser uses a building-permit file to investigate an addition. What is an important limitation of that source?
A real estate salesperson, acting solely in a brokerage role, prepares a CMA to help a listing client choose an asking price. Which statement is best?
An appropriately credentialed appraiser is offered a desktop assignment on an unfamiliar property type. A necessary competency gap is known before agreement. If the appraiser elects to proceed, what is required?
How should an appraiser identify potentially distressed transactions in a data set?
Why should an appraiser identify the data sources used in the report?
How should an appraiser treat a value estimate found on a consumer real estate website?
An appraiser builds a spreadsheet regression to support adjustments. How is it treated?
May an appraiser use data from a prior assignment for a different client?
The intended lender’s applicable assignment conditions require an interior inspection. The client asks the appraiser to deliver a desktop appraisal instead, and the inspection condition has not been authorized for modification. What should the appraiser do?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam