Why does a data set drawn only from one listing service risk being incomplete?
Correct Answer
B) Some sales never appear in that service
Some transactions may not appear in a particular listing service, including some direct owner or builder sales. That coverage gap can affect representativeness. Listing services can include closed-sale and historical data, so the other categorical assertions are false. Appropriate additional sources and verification depend on the assignment and actual coverage; no source should be assumed exhaustive.
Why This Is the Correct Answer
Option B is correct because some sales are never entered in a particular listing service, including some direct owner-to-buyer or builder transactions. A data set drawn only from that source can therefore miss part of the market, which can affect its representativeness. Additional sources and verification help fill such gaps, depending on the assignment.
Why the Other Options Are Wrong
Option A: Listing services record only asking prices
Option A says listing services record only asking prices. Listing services commonly include closed-sale information as well as asking prices, so this is not the reason the data may be incomplete.
Option C: Listing data may not be used in appraisals
Option C says listing data may not be used in appraisals. Listing service data are widely used in appraisal work; the concern is coverage, not a prohibition.
Option D: Services report only the current calendar year
Option D says services report only the current calendar year. Listing services commonly keep historical data, so a time limit of this kind is not the reason for incompleteness.
One source, partial picture
A single data source is like one camera angle: it shows a lot, but some sales happen off camera.
How to use: Use this to recall why appraisers check more than one data source.
Exam Tip
Choose the answer that describes a real coverage gap. Reject answers that make sweeping false claims about what listing services contain or whether they can be used.
Common Mistakes to Avoid
- -Assuming one listing service captures every sale
- -Believing listing services contain only asking prices
- -Thinking listing data cannot be used in appraisals
Concept Deep Dive
Analysis
This question tests awareness of data coverage limits. A single listing service may miss transactions that never passed through it, such as some direct owner or builder sales. That gap can make the data set incomplete and affect how representative it is.
Background Knowledge
Market data sources vary in what transactions they capture. Listing services are a primary source of sales data but may not include sales handled outside the service. Appraisers use public records, builders, parties to the transaction and other sources to verify data and fill gaps.
Real-World Application
An appraiser valuing a home in a new subdivision finds few sales in the listing service. Checking public records, she discovers the builder sold many homes directly, so she adds those verified sales to her analysis.
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