A comparable closed nine months ago; public records show it, but the parties will not discuss terms. Before relying on it, the appraiser should:
Correct Answer
A) Seek other verification and judge whether it is reliable enough to use
Seek reliable alternative evidence about price, terms, concessions and other material facts. Assess whether remaining uncertainty permits credible reliance for the intended use. Public recording alone does not establish every transaction fact, and an arbitrary lower weight does not cure materially unsupported data. A sale need not be automatically discarded solely because the original parties decline discussion.
Why This Is the Correct Answer
Option A is correct because the appraiser must collect, verify and analyze the information needed for credible results, and verification can come from other reliable sources such as the broker or a reliable data source. After seeking that verification, the appraiser judges whether any remaining uncertainty still allows credible reliance on the sale. A sale is not automatically discarded just because the buyer and seller decline to discuss it.
Why the Other Options Are Wrong
Option B: Accept the recorded terms, because recording confirms the transaction facts
Option B accepts the recorded terms because recording confirms the transaction facts. Public records show that a transfer happened, but they may not reveal concessions, financing terms or unusual conditions, so recording alone does not verify every material fact.
Option C: Reject the sale, because the parties will not confirm its terms
Option C rejects the sale because the parties will not confirm its terms. Other reliable sources, such as the listing or selling agent or a reliable data service, may provide adequate verification, so outright rejection is premature.
Option D: Assume typical terms and treat the confidentiality as verification
Option D assumes typical terms and treats the confidentiality as verification. Refusing to talk confirms nothing, and assuming typical terms without evidence could hide concessions or unusual conditions.
Recorded is not verified
A recorded deed proves a sale happened, not how it happened. Look for another reliable source before relying on it.
How to use: Use this to reject answers that treat public records alone as full verification.
Exam Tip
Prefer answers that both seek more information and judge reliability over answers that either blindly accept or automatically reject the data.
Common Mistakes to Avoid
- -Treating recorded deed data as complete verification of terms and concessions
- -Discarding a sale only because the buyer and seller will not talk
- -Assuming typical terms when no source has confirmed them
Concept Deep Dive
Analysis
This question tests sale verification when the parties will not cooperate. A recorded deed confirms that a transfer occurred, but it may not reveal concessions, financing or conditions of sale. The appraiser should seek reliable alternative sources and then decide whether the sale is reliable enough to support credible results.
Background Knowledge
Verifying a comparable sale means confirming its price, terms, conditions and property characteristics with knowledgeable sources. Fannie Mae lists parties to the transaction, such as the broker, buyer or seller, or a reliable data source as acceptable verification sources. USPAP requires the appraiser to collect, verify and analyze all information necessary for credible results.
Real-World Application
A strong comparable sold nine months ago, but the buyer and seller do not return calls. The appraiser contacts the listing agent, who confirms the price, the absence of concessions and normal marketing. With that verification, the appraiser uses the sale and notes the verification source in the report.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
Which of these is listed by Fannie Mae as a sales or financing concession?
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