A reviewer reads an appraisal of a 1920s bungalow in which differences in curb appeal, quality of finish, and street setting were analyzed by relative comparison rather than by dollar adjustments. Which content in the report lets the reviewer follow the appraiser's reasoning?
Correct Answer
C) Each sale's ratings, its overall rank, and why the subject was placed where it was
A reader can follow a relative comparison only if the report shows how each sale was rated on the elements that matter, how the sales rank overall, and why the subject falls where it does in that array. A bare statement that qualitative analysis was used describes nothing of the work performed. Backing into dollar adjustments invents figures the analysis never measured, and a mean of the prices skips the comparison entirely.
Why This Is the Correct Answer
Option C is correct because each sale's ratings, its overall rank, and the reason for the subject's placement show the work performed and let a reader retrace each step. Reports are expected to give fact-based comments that detail the work and data behind the analysis, and a statement that merely notes an analysis was made is not enough.
Why the Other Options Are Wrong
Option A: A statement that qualitative analysis was used, followed by the final value opinion
Option A offers only a statement that qualitative analysis was used plus the final value. That names the method without showing how any sale was rated or ranked, so a reviewer cannot follow or test the reasoning.
Option B: Dollar adjustments worked backward so each sale adjusts to the final value opinion
Option B works dollar adjustments backward so each sale adjusts to the final value. Those figures are reverse-engineered rather than measured from the market, so they misrepresent the analysis and do not explain the ranking actually performed.
Option D: The mean of the comparables' sale prices, shown so the reviewer can recompute it
Option D reports the mean of the comparables' prices. Averaging prices ignores how each sale compares with the subject, so it neither reflects nor explains a relative comparison analysis.
Rate, rank, reason
A qualitative analysis is reported in three parts: the ratings, the ranking, and the reason for the subject's place.
How to use: Use this when asked what a report must show for a qualitative or relative comparison analysis.
Exam Tip
Prefer the option that lets a reader retrace the analysis step by step over one that only names the method or gives a single number.
Common Mistakes to Avoid
- -Naming the method without showing the ratings
- -Backing into dollar adjustments to match the conclusion
- -Reporting an average price in place of the analysis
Concept Deep Dive
Analysis
The question tests what a report must contain when the appraiser relies on relative comparison. Because there are no dollar figures to check, the reasoning itself has to be visible: the element ratings, the overall ranking, and the placement of the subject. A reader who sees these can test the conclusion.
Background Knowledge
Relative comparison produces a ranked array rather than a column of adjusted prices. Its credibility depends on transparent reasoning: which elements were compared, how each sale rated, and why the subject sits between particular sales. Fannie Mae calls for fact-based, objective comments detailing the work performed.
Real-World Application
An underwriter questions a bungalow appraisal that rated sales on curb appeal and finish quality. The appraiser adds a table of each sale's ratings and a paragraph explaining why the subject falls between the second- and third-ranked sales.
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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An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
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