California Real Estate SalespersonProperty Valuation and Financial AnalysisMedium
An appraiser is valuing a subject property believed to be worth approximately $300,000. To support this conclusion, the appraiser selects one comparable that sold for $290,000 and another that sold for $312,000, so the subject's estimated value falls between the two sale prices. This appraisal technique is called:
- AHighest and best use analysis
- BSubstitution
- CReconciliation
- DBracketing
Show answer & explanationAnswer & explanation
Correct answer: D. Bracketing
Bracketing involves selecting comparable sales above and below the estimated value of the subject property to test and support the reasonableness of the value conclusion.
Why the other options are wrong
- A. Highest and best use concerns optimal property use, unrelated to comparable selection technique.
- B. Substitution is the underlying appraisal principle, not this specific comparable-selection technique.
- C. Reconciliation is the final blending of value indications from different approaches, not comparable selection.
Bracketing
An appraisal technique of choosing comparable sales that fall both above and below the subject's estimated value to support the value conclusion.
- Strengthens credibility of value opinion
- Uses at least one comp above and one below estimated value
- Different from reconciliation, which blends approaches
Memory trick: Bracket it — high comp, low comp, value in between