Question 1

The quantity of data collected is not a factor in reviewing the results of a particular&#10;value approach.

Accepted Answer

The quantity of data collected is a significant factor in reviewing the results of a particular value approach, as it affects the statistical significance, reliability, and generalizability of the findings.

Question 2

Appraising the appraisal means to evaluate each value approach, the data used, and the range of indicated value.

Accepted Answer

Appraising the appraisal involves evaluating each value approach, the data used, and the range of indicated value to ensure accuracy and completeness in the appraisal report.

Question 3

The final value conclusion should be an average of the three approaches to value.

Accepted Answer

The final value conclusion in an appraisal is not necessarily an average of the three approaches to value (cost, market, and income approaches). It is determined by the appraiser's judgment and analysis of which approach provides the most reliable evidence of value for the specific property being appraised.

Question 4

Reconciliation is defined as estimating value.

Accepted Answer

Reconciliation is a process of comparing and matching different sets of financial records to ensure accuracy and consistency. It is not necessarily related to estimating value.

Question 5

Before reconciliation begins, the appraiser should review the overall appraisal process.

Accepted Answer

It is important for the appraiser to review the overall appraisal process before beginning the reconciliation process to ensure that all necessary information has been considered and any potential errors or inconsistencies have been identified.

Question 6

The value conclusion should fall within the range of value indications from the approaches applied.

Accepted Answer

The value conclusion should be consistent and coherent with the range of value indications obtained from the applied approaches. Therefore, it should typically fall within this range or provide a reason why it does not. If the value conclusion is outside the scope of the value indications, it may require further exploration or reconsideration of the approaches used.

Question 7

Rounding the final answer to a large number of significant digits adds professionalism to the appraisal.

Accepted Answer

Rounding the final answer to a large number of significant digits does not add professionalism to the appraisal. It can actually give a false sense of accuracy and precision, and can be misleading to the reader. It is recommended to round to an appropriate number of significant digits based on the level of precision of the data and the context of the appraisal.

Question 8

If large adjustments were required in any approach, the value indicated by that approach should be totally ignored.

Accepted Answer

While large adjustments in any valuation approach may raise concerns about the reliability of the value indicated by that approach, it does not mean the value should be totally ignored. Instead, it suggests that the appraiser should carefully consider the reasons for the adjustments and evaluate the approach's relevance and accuracy in light of those adjustments.

Question 9

The sales comparison approach is considered the most direct of the three approaches.

Accepted Answer

The sales comparison approach directly compares the subject property to recently sold comparable properties in the same market. Therefore, it is considered the most direct approach.

Question 10

If the data reviewed for one value approach is marginally reliable, the resulting value is still given equal weight.

Accepted Answer

If the data reviewed for one value approach is marginally reliable, it typically would not be given equal weight in the valuation process. Reliable and robust data are crucial for accurate valuations, and less reliable data would likely be weighted accordingly or possibly disregarded.

Deck 15: Reconciling the Value Estimates