RPA Sales Comparison Approach 3

Question 1

How does an appraiser reconcile multiple comparable sales into a final value indication in the sales comparison approach?

Accepted Answer

By weighing comparables based on their similarity, data reliability, and adjustment magnitude

Answer

By averaging all adjusted sale prices equally

Answer

By selecting the median adjusted sale price

Answer

By selecting only the highest adjusted sale price

Question 2

If a comparable property has a two-car garage and the subject property has no garage, what type of adjustment is made and to which property?

Accepted Answer

A negative adjustment to the comparable sale

Answer

A positive adjustment to the subject property

Answer

A positive adjustment to the comparable sale

Answer

A negative adjustment to the subject property

Question 3

Which of the following BEST describes the concept of 'market-derived adjustments'?

Accepted Answer

Adjustments derived from analyzing actual market data such as paired sales

Answer

Adjustments based on the appraiser's personal experience

Answer

Adjustments based on cost-to-cure estimates from contractors

Answer

Adjustments published in national appraisal fee schedules

Question 4

What does USPAP require regarding the number of comparable sales used in the sales comparison approach?

Accepted Answer

USPAP does not specify a minimum number; the appraiser must use sufficient data

Answer

At least three comparable sales must be used

Answer

At least five comparable sales must be used for residential properties

Answer

Exactly six comparable sales must be included in the grid

Question 5

In the sales comparison approach, what is meant by 'location adjustment'?

Accepted Answer

An adjustment reflecting differences in neighborhood quality, traffic, views, or other locational influences

Answer

An adjustment for the property's distance from the appraiser's office

Answer

An adjustment for the county or state where the property is located

Answer

An adjustment for the property's zoning classification

Question 6

What is the primary weakness of the sales comparison approach when appraising unique or special-use properties?

Accepted Answer

There may be few or no truly comparable sales available in the market

Answer

It requires too many mathematical calculations

Answer

It cannot account for differences in construction quality

Answer

It is not recognized by USPAP as a valid approach for unique properties

Question 7

When the subject property's value indication from the sales comparison approach differs significantly from the cost and income approaches, what should the appraiser do?

Accepted Answer

Analyze the reasons for the discrepancy and reconcile the approaches through professional judgment

Answer

Always defer to the sales comparison approach as it is the most reliable

Answer

Discard the approach with the highest value to avoid overvaluation

Answer

Average all three approaches arithmetically