A lakefront cottage comparable sold for $489,000. The sale included the seller's pontoon boat, with a verified market value of $22,000, and the living room furniture, with a verified market value of $6,000. The seller had paid $35,000 for the boat new three years ago. Both the comparable and the subject have a deeded boat slip. What is the comparable's sale price for the real property alone?
Correct Answer
A) $461,000
Personal property included in a sale is not real estate, so its market value is removed from the price: $489,000 - $22,000 - $6,000 = $461,000. The seller's $35,000 purchase cost is not market value, and the deeded slip is real property that both homes share. Removing only the boat gives $467,000, only the furniture $483,000, and no adjustment $489,000.
Why This Is the Correct Answer
Option A is correct because both the boat ($22,000) and the furniture ($6,000) are personal property at verified market value. Removing both gives $489,000 - $28,000 = $461,000, the price paid for the real estate.
Why the Other Options Are Wrong
Option B: $467,000
Option B, $467,000, removes the $22,000 boat but leaves in the $6,000 of furniture ($489,000 - $22,000). Furniture is personal property too, so it must also be removed, giving $461,000.
Option C: $483,000
Option C, $483,000, removes the $6,000 of furniture but not the $22,000 boat ($489,000 - $6,000). A boat is personal property, not part of the real estate, so its market value also comes out.
Option D: $489,000
Option D, $489,000, makes no deduction. The price includes $28,000 of personal property at market value, so it overstates what the buyer paid for the real estate.
If it floats or moves, deduct
Items that can be carried, driven or floated away are usually personal property. Take their market value, not what the seller paid, out of the price.
How to use: Use this when a comparable's sale included boats, vehicles, furniture or equipment.
Exam Tip
Watch for a seller's cost figure next to a market value figure; the deduction uses market value at the time of sale.
Common Mistakes to Avoid
- -Deducting the seller's original cost instead of market value
- -Removing a real property feature such as a deeded slip
- -Forgetting smaller items like furniture
Concept Deep Dive
Analysis
The question tests the non-realty element: items of personal property that changed hands with the house must come out of the price at their market value. The candidate must also set aside two distractions, the seller's original cost of the boat and the boat slip, which is real property both homes have.
Background Knowledge
Non-realty items such as furniture, vehicles, boats and equipment are sometimes included in a home sale. Their market value at the time of sale, not their original cost, is deducted so the comparable reflects real property only. Fannie Mae lists the inclusion of non-realty items among sales concessions.
Real-World Application
A buyer of a lake cottage negotiates to keep the seller's pontoon boat and furniture. When that sale becomes a comparable, the appraiser confirms with the listing agent what the items were worth and deducts that amount before adjusting for other differences.
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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