Humber/Ontario Real Estate Course 3 Exam Practice

Is an appraiser allowed to provide a valuation as a range?

1. Only acceptable for commercial properties.

2. Acceptable if the figures are within a 1% range of each other.

3. Acceptable, especially with few comparables.

4. Not permitted; a single-point value is required.

The correct answer is: Acceptable, especially with few comparables.

Providing a valuation as a range is particularly acceptable in scenarios where there are few comparables to rely on. This situation often arises in unique or specialized properties where market data is limited, making it challenging to arrive at a precise value. A range allows for a more flexible analysis that considers potential variations in market conditions or property features that could influence value. In the real estate appraisal profession, using a range can reflect the uncertainty inherent in property valuation, especially in less common or highly specialized markets. Relying solely on a single-point value may not adequately capture this uncertainty, whereas a range can provide a more nuanced understanding of a property's value under varying circumstances. On the other hand, in traditional valuation practices, particularly for standard residential home appraisals where many comparables are available, appraisers typically aim for a single-point value. This clearer determination is generally preferred, allowing for more straightforward transactions and negotiations. However, when facing limited data, the flexibility of presenting a valuation as a range can be very beneficial.