An active listing priced at $415,000 for 90 days without an offer tells the appraiser what about value?
Correct Answer
B) Its relevance and exposure need study before drawing conclusions
An active listing with no offers is evidence to investigate its pricing, exposure, condition and competition. Asking price and days on market alone do not establish a hard ceiling for the subject’s value; relevance and typical exposure must be analyzed.
Why This Is the Correct Answer
Option B is correct because the listing's relevance and exposure need study before any conclusion is drawn. Fannie Mae requires appraisers to analyze offerings or listings of the most comparable properties to identify differences that could affect the opinion of value, so the listing is relevant evidence but its meaning depends on that analysis.
Why the Other Options Are Wrong
Option A: Its asking price is a proven upper bound on the subject’s value
Option A treats the $415,000 asking price as a proven upper bound on the subject's value. A listing's asking price and days on market alone do not establish a hard ceiling; the listing may differ from the subject or be priced for other reasons.
Option C: Its asking price is a firm minimum for the subject’s value
Option C treats the $415,000 asking price as a firm minimum for the subject's value. Nothing about an unsold listing sets a floor under the subject's value.
Option D: Nothing, since listings that have not sold are irrelevant
Option D says the listing tells the appraiser nothing because unsold listings are irrelevant. Fannie Mae calls for analyzing comparable listings, so unsold listings can be relevant evidence.
Listings are clues, not caps
An unsold listing is a clue to study, not a cap or floor on value.
How to use: Use this when an option treats a listing price as a firm limit.
Exam Tip
Choices that turn a single listing into a ceiling or floor overstate what the listing can prove.
Common Mistakes to Avoid
- -Treating an asking price as a value ceiling
- -Ignoring active listings in the analysis
- -Drawing conclusions without checking exposure and condition
Concept Deep Dive
Analysis
This question tests how an appraiser uses an active listing that has gone unsold. A listing with no offers after 90 days is evidence worth studying, not a fixed limit on value. The appraiser analyzes its pricing, exposure, condition and competitiveness before drawing conclusions.
Background Knowledge
Listings show what sellers are asking and how the market is responding. A long-unsold listing may suggest overpricing, condition issues or limited demand, but the reasons must be investigated. Listings are analyzed along with closed and contract sales.
Real-World Application
A nearby home listed at $415,000 has sat for 90 days with no offers. The appraiser learns it needs a new roof and has had limited showings, which helps explain the lack of offers and how much the listing should bear on the subject's value.
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?
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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?
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