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Sales ComparisonMEDIUM16.4% of exam

A comparable’s buyer assumes a below-market loan. Which analytical element most directly concerns that financing arrangement?

Correct Answer

B) Financing terms and any supported cash-equivalency effect

A below-market assumed loan primarily concerns financing terms. Analyze whether its actual price effect differs from market financing, rather than automatically assigning a cost-based deduction. Conditions of sale concern transaction circumstances such as motivation or relationships; market conditions concern time-related movement. Financing and sale circumstances may both matter, but they are distinct analytical elements.

Answer Options
A
The property’s physical location
B
Financing terms and any supported cash-equivalency effect
C
Time-related market conditions alone
D
The building’s physical dimensions

Why This Is the Correct Answer

A below-market assumed loan primarily concerns financing terms. Analyze whether its actual price effect differs from market financing, rather than automatically assigning a cost-based deduction. Conditions of sale concern transaction circumstances such as motivation or relationships; market conditions concern time-related movement. Financing and sale circumstances may both matter, but they are distinct analytical elements.

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