What risk arises when an appraiser uses only one data source for an entire market study?
Correct Answer
B) Transactions outside that source are invisible
A single source may omit private sales, certain property types, geographic segments or other relevant transactions. Assess its coverage and bias for the assignment and cross-check or supplement it where needed. USPAP does not prohibit every single-source study or prescribe one fixed source count. Using more sources also does not by itself guarantee completeness or credibility.
Why This Is the Correct Answer
Option B is correct because transactions outside a single source are invisible to a study that relies only on that source. A single source may omit private sales, certain property types, geographic segments or other relevant transactions. The appraiser should assess its coverage and bias and cross-check or supplement it where needed.
Why the Other Options Are Wrong
Option A: The study will take longer than using several
Option A is wrong because the risk of a single-source study is incomplete coverage, not that it takes longer than using several sources. Using one source would generally take less time, not more.
Option C: Single-source studies are barred under Standard 1
Option C is wrong because single-source studies are not barred under Standard 1. USPAP does not prohibit every single-source study or prescribe a fixed number of sources.
Option D: The source will charge a higher subscription fee
Option D is wrong because a higher subscription fee is a business cost, not an analytical risk to the market study. The concern is missing transactions, not price.
One window, partial view
Looking through one data window shows only part of the market. Sales outside the window go unseen.
How to use: Use this when a question asks about the risk of relying on a single data source.
Exam Tip
Choose the answer about coverage or completeness. Distractors about cost, time or a USPAP ban do not address the analytical risk.
Common Mistakes to Avoid
- -Assuming one database captures every relevant sale
- -Believing USPAP requires a set number of data sources
- -Assuming more sources automatically guarantee a complete study
Concept Deep Dive
Analysis
This question tests awareness of data coverage risk. A single data source may omit private sales, some property types or geographic segments, so relevant transactions may be missing from the study. The reasoning focuses on completeness and bias, not on time, cost or a supposed USPAP ban.
Background Knowledge
Data sources such as MLS, public records and commercial databases each have gaps in coverage. Appraisers evaluate whether a source adequately represents the market for the assignment and supplement it when needed, keeping in mind that more sources do not by themselves guarantee completeness.
Real-World Application
An appraiser studying rural land sales uses only MLS data and finds few transactions. Checking county deed records reveals several private sales never listed on MLS, which change the indicated price trend.
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