CAR CAR Market Analysis & Trends 2

Question 1

Which data source is most commonly used by appraisers in the US to support neighborhood market trend analysis?

Accepted Answer

Multiple Listing Service (MLS) data

Answer

MLS databases provide the most current and comprehensive records of listed, pending, and sold properties in a defined market area, making them the primary tool for market trend support.

Question 2

When a reviewer assesses the appraiser's market area definition, what is the most important factor to verify?

Accepted Answer

The market area boundaries reflect where buyers and sellers compete for similar properties

Answer

A valid market area is defined by competitive boundaries—where buyers actually consider properties interchangeable—rather than arbitrary geographic limits.

Question 3

What is a paired sales analysis used for in real estate appraisal and review?

Accepted Answer

Isolating the contributory value of a single feature by comparing otherwise identical sales

Answer

Paired sales analysis minimizes all variables except the feature being studied, allowing the market to 'speak' to the value contribution of that specific amenity or condition.

Question 4

A reviewer is examining an appraisal in a market with limited sales data. Which approach is most appropriate when comparable sales are scarce?

Accepted Answer

Expand the search area or time frame while supporting any resulting adjustments with market data

Answer

When sales are scarce, appraisers may broaden geographic or time boundaries, but must apply and defend adjustments that account for any differences introduced by the expanded search.

Question 5

Seasonal market fluctuations are best addressed in an appraisal review by:

Accepted Answer

Confirming the appraiser acknowledged seasonality and used comparables consistent with the effective date's season

Answer

Seasonality must be considered when selecting and adjusting comparables; the reviewer should verify the appraiser's methodology accounts for typical seasonal price and activity patterns.

(CAR) Certified Appraisal Reviewer Practice Test

(CAR) Certified Appraisal Reviewer Practice Test

CAR CAR Market Analysis & Trends 2