CRPA Comparable Sales Analysis & Adjustments 3

Question 1

In relocation appraisal, what does 'reconciliation' of the sales comparison approach involve?

Accepted Answer

Critically weighing each comparable's adjusted value based on similarity, data reliability, and adjustment magnitude to arrive at a final value opinion

Answer

Reconciliation requires the appraiser to critically evaluate each comparable's reliability and give appropriate weight to arrive at a credible final value conclusion.

Question 2

Which adjustment type would be appropriate to account for the fact that the subject property has a finished basement and the comparable does not?

Accepted Answer

Functional utility adjustment to the comparable

Answer

A positive adjustment is added to the comparable to account for the subject's superior feature (finished basement), classified under functional utility or a specific line item.

Question 3

What is the best practice when no directly comparable sales are available within the immediate neighborhood?

Accepted Answer

Expand the geographic search area and apply location adjustments for differences in competing neighborhoods

Answer

When local sales are insufficient, expanding the search area with appropriate location adjustments maintains the integrity of the sales comparison approach.

Question 4

What does a 'concession adjustment' in a comparable sale account for?

Accepted Answer

Seller-paid financing points, closing costs, or other incentives included in the sale that inflate the reported price

Answer

Concession adjustments remove the effect of seller-paid incentives that inflate the comparable's sale price above what a cash-equivalent, arm's-length transaction would reflect.

Question 5

For ERC-conforming relocation appraisals, why is it important to use only 'anticipated exposure period' market conditions rather than extended marketing conditions?

Accepted Answer

Because relocation appraisals must reflect value achievable in a normal marketing period consistent with local buyer demand

Answer

ERC guidelines define value based on an anticipated exposure period reflecting realistic local market absorption, ensuring the employer pays a fair price linked to achievable market outcomes.

(CRPA) Certified Relocation Professional Appraiser Practice Test

(CRPA) Certified Relocation Professional Appraiser Practice Test

CRPA Comparable Sales Analysis & Adjustments 3