Which statement about averaging the three approaches is correct?

Correct Answer

C) It substitutes arithmetic for appraisal judgment

Why this is correct: Reconciliation requires the appraiser to exercise professional judgment about the reliability and applicability of each value indication. Averaging mechanically applies equal weight to each indication, regardless of its support, which bypasses this required judgment. Why the other choices are wrong: "It is required whenever all three are developed" is incorrect; reconciliation, not averaging, is required. "It is acceptable if the three indications are close" is incorrect; closeness does not make averaging a proper method; it may make the error less significant, but it's still a substitution of arithmetic for judgment. "It is the preferred method for residential work" is incorrect; it is not preferred and is generally considered unacceptable professional practice. Exam tip: Averaging is arithmetic, not appraisal judgment. Always reconcile based on the quality of the data behind each approach.