Real Estate Appraisal Practice Exam

How does an appraiser reconcile the adjusted sales prices of comparable properties to indicate the value of the subject property?

1. The appraiser averages the adjusted sales prices of all comparable properties.

2. The appraiser selects the adjusted sales price of the property most like the subject.

3. The appraiser chooses the highest adjusted sales price of the comparables.

4. The appraiser discards any comparables with adjustments over 10%.

The correct answer is: The appraiser selects the adjusted sales price of the property most like the subject.

The process of reconciling the adjusted sales prices of comparable properties is critical in establishing an accurate value for the subject property. By selecting the adjusted sales price of the property that most closely resembles the subject property, the appraiser can ensure that the value considered is based on the most relevant and comparable data. This method takes into account factors like location, size, condition, and features of the properties, helping to hone in on a value that reflects the current market conditions while being valid for the specific characteristics of the subject property. When selecting an adjusted sales price from comparables, the appraiser is looking for the property that offers the best likeness to the subject in terms of important qualitative aspects, which ultimately leads to a more reliable and defendable appraisal value. The other methods mentioned, such as averaging all comparable sales prices, may dilute the precision of the value estimation by including properties that are less comparable. Focusing solely on the highest adjusted sales price disregards the importance of relevance and may inflate the value inaccurately. Discarding comparables with significant adjustments might be overly restrictive, potentially leading to a loss of valuable market insight that could be gained from those properties. Therefore, selecting the adjusted price from the most similar comparable provides the most accurate reflection of