When paired data is unavailable for a feature, an adjustment may be supported by:
Correct Answer
B) Cost less depreciation, or regression, with the method disclosed
Why this is correct: When direct market data (paired sales) is unavailable, an adjustment can be supported by other recognized methods like cost less depreciation or regression analysis, provided the method is disclosed in the report. Why the other choices are wrong: 'The appraiser's personal preference for that particular feature type' is wrong because adjustments must be based on objective analysis, not personal bias. 'The listing agent's estimate of what the feature ought to be worth' is wrong as it is an unverified opinion, not a proper analytical method. 'A flat five percent applied uniformly to every unsupported feature' is wrong because arbitrary, uniform percentages are not credible or defensible. Exam tip: The hierarchy is: paired sales first, then cost-based or statistical methods.
Why This Is the Correct Answer
Why this is correct: When direct market data (paired sales) is unavailable, an adjustment can be supported by other recognized methods like cost less depreciation or regression analysis, provided the method is disclosed in the report. Why the other choices are wrong: 'The appraiser's personal preference for that particular feature type' is wrong because adjustments must be based on objective analysis, not personal bias. 'The listing agent's estimate of what the feature ought to be worth' is wrong as it is an unverified opinion, not a proper analytical method. 'A flat five percent applied uniformly to every unsupported feature' is wrong because arbitrary, uniform percentages are not credible or defensible. Exam tip: The hierarchy is: paired sales first, then cost-based or statistical methods.
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Previous Question
A paired sales analysis reveals that homes with stainless-steel appliances sell for $2,100 more than identical homes with standard appliances — but only when the homes are priced below $350,000. In the subject’s neighborhood, median sale price is $410,000. What is the appraiser’s obligation regarding the $2,100 appliance adjustment?
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In the reconciliation narrative, which sentence actually does analytical work?