Why should an appraiser be cautious about a data source that reports only successful transactions?
Correct Answer
A) Withdrawn and expired listings also inform the market
Why this is correct: A complete market analysis requires data on both successful and unsuccessful transactions. Withdrawn and expired listings reveal the upper price limit the market rejects, indicating softening demand. Why the other choices are wrong: "Successful transactions are less reliable than listings" is false; closed sales are typically the most reliable indicator of value. "Such sources charge more than comprehensive ones" is an irrelevant operational detail, not an appraisal principle. "Closed sales may not be used without an interview" is incorrect; sales data is standard and does not require an interview. Exam tip: To avoid a biased analysis, seek data on both what sold and what did not sell.
Why This Is the Correct Answer
Why this is correct: A complete market analysis requires data on both successful and unsuccessful transactions. Withdrawn and expired listings reveal the upper price limit the market rejects, indicating softening demand. Why the other choices are wrong: "Successful transactions are less reliable than listings" is false; closed sales are typically the most reliable indicator of value. "Such sources charge more than comprehensive ones" is an irrelevant operational detail, not an appraisal principle. "Closed sales may not be used without an interview" is incorrect; sales data is standard and does not require an interview. Exam tip: To avoid a biased analysis, seek data on both what sold and what did not sell.
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