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.
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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