Key Takeaways
- Three error sources compound: data quality (3%), selection bias (2%), and adjustment accuracy (3%).
- Build confidence intervals into your analysis to quantify precision honestly.
- Multiple red flags require supplementary approaches or wider margins of safety.
- USPAP and FIRREA provide quality standards investors should apply to their own analyses.
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Test Your Knowledge
1.In Comp Analysis Reliability and Error Management, what determines the reliability of a comparable sale?
2.What is the maximum recommended net adjustment for a single comparable sale?
3.How should the final value be determined from multiple adjusted comparable sales?