What must an appraiser establish before relying on data from a third-party aggregator?
Correct Answer
B) That the data is adequate for the intended use
Why this is correct: The governing concept is that an appraiser's reliance on any data source, including third-party aggregators, is a scope of work decision under USPAP. The appraiser must ensure the data is adequate for the intended use of the appraisal, meaning it supports credible assignment results. Aggregated data may have lags or errors, so the appraiser must verify its suitability. Why the other choices are wrong: "That the aggregator carries professional insurance" is incorrect because insurance is not a requirement for data reliance. "That the aggregator is licensed in that state" is incorrect because data aggregators are not typically licensed. "That the client has approved that data source" is incorrect because client approval does not relieve the appraiser of responsibility for data adequacy. Exam tip: You are responsible for data credibility regardless of the source; always assess adequacy for your specific assignment.
Why This Is the Correct Answer
Why this is correct: The governing concept is that an appraiser's reliance on any data source, including third-party aggregators, is a scope of work decision under USPAP. The appraiser must ensure the data is adequate for the intended use of the appraisal, meaning it supports credible assignment results. Aggregated data may have lags or errors, so the appraiser must verify its suitability. Why the other choices are wrong: "That the aggregator carries professional insurance" is incorrect because insurance is not a requirement for data reliance. "That the aggregator is licensed in that state" is incorrect because data aggregators are not typically licensed. "That the client has approved that data source" is incorrect because client approval does not relieve the appraiser of responsibility for data adequacy. Exam tip: You are responsible for data credibility regardless of the source; always assess adequacy for your specific assignment.
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