Under Fannie Mae Selling Guide B4-1.3-09, which interval is analyzed to determine whether a comparable needs a market-conditions adjustment?
Correct Answer
B) From its contract date to the effective date
For the cited Fannie policy, analyze market movement from the comparable’s contract date to the effective date. Apply a supported adjustment when warranted; a zero adjustment also needs evidence. Listing, recording and price-change dates do not define this interval.
Why This Is the Correct Answer
Option B is correct because Selling Guide B4-1.3-09 requires analyzing comparable sales for changes in market conditions from their contract dates through the effective date of the appraisal. The contract date is when the price was agreed, and the effective date is the point in time the appraisal addresses.
Why the Other Options Are Wrong
Option A: From its original listing date to the report date
Option A, from its original listing date to the report date, uses the wrong start and end points. The price is set at contract, not listing, and the appraisal speaks as of the effective date rather than the report date.
Option C: From the deed recording date to the report date
Option C, from the deed recording date to the report date, starts too late and ends at the wrong date. Recording follows the contract, and the guide measures to the effective date.
Option D: From the listing’s last price change to the sale date
Option D, from the listing's last price change to the sale date, does not reach the effective date at all. The guide measures from the contract date through the effective date.
Contract to effective
The price was set at contract and the appraisal speaks as of the effective date, so measure the market change between those two dates.
How to use: Use this to pick the right interval in time-adjustment questions.
Exam Tip
Separate the effective date from the report date. Fannie Mae's time-adjustment interval runs from contract date to effective date.
Common Mistakes to Avoid
- -Measuring from the closing or recording date
- -Using the report date instead of the effective date
- -Making a zero adjustment without supporting evidence
Concept Deep Dive
Analysis
This question tests the time interval Fannie Mae uses for market-conditions analysis. Selling Guide B4-1.3-09 directs the appraiser to analyze changes from the comparable's contract date through the effective date. Listing, recording and price-change dates do not define this interval.
Background Knowledge
An appraisal is for a specific point in time, the effective date. Because a sale price reflects the market when the parties agreed to terms, the contract date is the starting point for measuring market change. Both a positive adjustment and a zero adjustment need supporting evidence.
Real-World Application
A comparable went under contract four months before the effective date but closed only two months before it. The appraiser measures market change over the four months from contract, not the two months from closing.
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