After qualitative ranking, comparable A ($402,000) is inferior to the subject and comparable B ($418,000) is superior. What does this bracketing indicate?
Correct Answer
C) A value between $402,000 and $418,000
An inferior comparable sets a lower bound and a superior one an upper bound, so the subject falls between $402,000 and $418,000. Qualitative analysis does not by itself fix the midpoint.
Why This Is the Correct Answer
Option C is correct because comparable A at $402,000 is inferior, so the subject should be worth more, and comparable B at $418,000 is superior, so the subject should be worth less. The subject therefore falls between $402,000 and $418,000. Qualitative ranking places the subject within the array but does not fix an exact point.
Why the Other Options Are Wrong
Option A: A value below $402,000
Option A, a value below $402,000, is wrong because $402,000 belongs to an inferior comparable. The subject is better than that sale, so its value should be above, not below, $402,000.
Option B: A value of exactly $410,000, the midpoint
Option B, exactly $410,000, the midpoint, is wrong because qualitative analysis does not by itself fix the midpoint. It indicates a range of $402,000 to $418,000, and further analysis is needed to narrow it.
Option D: A value above $418,000
Option D, a value above $418,000, is wrong because $418,000 belongs to a superior comparable. The subject is inferior to that sale, so its value should be below $418,000.
Worse below, better above
An inferior sale's price sits under the subject's value, and a superior sale's price sits over it.
How to use: Use this to place the subject within a qualitatively ranked array.
Exam Tip
Qualitative bracketing gives a range; be wary of answers that pick an exact midpoint without further analysis.
Common Mistakes to Avoid
- -Assuming the midpoint is the indicated value
- -Reversing which comparable sets the upper and lower bounds
- -Placing the subject outside the bracketed range
Concept Deep Dive
Analysis
This question tests what qualitative bracketing tells the appraiser. An inferior comparable sets a lower bound and a superior comparable sets an upper bound. Qualitative analysis places the subject within that range but does not by itself pinpoint a figure.
Background Knowledge
Qualitative analysis ranks comparables as superior, inferior or similar to the subject without dollar adjustments. The subject is then placed within the ranked array of sales. Inferior sales set lower limits and superior sales set upper limits.
Real-World Application
An appraiser valuing a unique rural property finds one inferior sale at $402,000 and one superior sale at $418,000. With limited data for dollar adjustments, the appraiser ranks the sales qualitatively. The subject's value is concluded within the range, supported by further reasoning about where it fits.
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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A recent sale of a two-story home closed at $378,000. Its listing reports 2,700 square feet of finished area, which includes 900 square feet of finished basement; its above-grade GLA is 1,800 square feet. The subject has 2,100 square feet of above-grade GLA and no basement. Market data show buyers here pay far less for finished basement space than for above-grade living area. The appraiser divides the price by 2,700 and applies the resulting $140 per square foot to the subject's GLA. What is wrong with this analysis?