Adjusted sale indications are $505,000, $512,000 and $498,000. What should primarily guide their relative weight?
Correct Answer
D) Comparability, verification and market support for the adjustments.
Assess how well each sale represents the subject’s market and how well its transaction and adjustments are supported. Neither adjustment magnitude alone nor proximity to a desired conclusion determines reliability. The three figures do not supply enough information to prescribe numerical weights.
Why This Is the Correct Answer
Option D is correct because the reliability of each adjusted indication depends on comparability, verification and market support for the adjustments. Adjustments made to each comparable should be evaluated, with the greatest weight given to the sales closest in comparability to the subject. The three dollar figures alone do not supply enough information to set weights.
Why the Other Options Are Wrong
Option A: Which sale was entered first in the analysis.
Option A, which sale was entered first in the analysis, is wrong because data-entry order has no bearing on how comparable or reliable a sale is.
Option B: Which indication is nearest the value the client hoped to see in the report.
Option B, which indication is nearest the value the client hoped to see, is wrong because weighting toward a desired result compromises the appraiser's impartiality and the credibility of the opinion.
Option C: Which price is highest after adjustments.
Option C, which price is highest after adjustments, is wrong because the highest adjusted figure, here $512,000, is not more reliable simply because it is highest.
Closest and best-supported wins
The adjusted sale that is most like the subject and best supported deserves the most weight.
How to use: Use this when a question asks how to weigh several adjusted comparable sales.
Exam Tip
Choose the answer focused on comparability and support. Order, client wishes and the highest number are distractors.
Common Mistakes to Avoid
- -Weighting the sale closest to the client's expectation
- -Choosing the highest adjusted price
- -Ignoring whether the sale was verified
Concept Deep Dive
Analysis
This question tests what should drive the relative weight of adjusted comparable sales. The figures themselves do not tell you which sale is most reliable. Weight should depend on how comparable each sale is, whether the transaction was verified, and how well the adjustments are supported.
Background Knowledge
Comparability determines which adjustments are needed and how large they are. Sales that are most similar, well verified and supported by market-derived adjustments generally provide the most reliable indications of value.
Real-World Application
An appraiser has three adjusted sales within a narrow range. One is on the same street, confirmed with the listing agent and needs only a small time adjustment, so the appraiser gives it the most weight and explains why in the report.
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Previous Question
The three approaches to value indicate $525,000, $490,000 and $505,000. The appraiser assigns them weights of 60%, 25% and 15%, respectively. What is the weighted indication, rounded to the nearest dollar?
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