Certified Residential Appraiser Practice Exam

What is the minimum number of comparable sales typically required by clients?

1. 2

2. 3

3. 4

4. 5

The correct answer is: 3

The minimum number of comparable sales typically required by clients is three. This standard has emerged as a best practice in the appraisal profession because using three comparable sales allows for a more reliable and balanced analysis of the property being appraised. Having three comparables gives appraisers enough data points to identify trends and adjustments in price, helping to ensure a well-supported final value. This number strikes a practical balance, enabling the appraiser to account for variations in property features, location, and market conditions while also addressing the diversity of the market. Using fewer than three comparables may not provide sufficient information to establish a credible estimate of value, as there could be too few data points to draw reliable conclusions. Having only two comparables might lead to skewed results if either of the sales is an outlier or not sufficiently representative of the subject property. This is why three is considered the minimum standard in the industry for a robust appraisal process, ensuring that the analysis is thorough enough to satisfy clients' needs and expectations.