An appraiser cannot obtain a comparable’s concession data because of legal disclosure limits. What does Fannie Mae require?
Correct Answer
B) Explain why the data are unavailable
If concession information is not available because of legal restrictions or other disclosure problems, the appraiser must explain why. Assuming no concessions or deducting an arbitrary amount is unsupported.
Why This Is the Correct Answer
Option B is correct because when concession information is unavailable due to legal restrictions or other disclosure problems, the appraiser must explain why the information is not available. This keeps the report transparent about the data limitation.
Why the Other Options Are Wrong
Option A: Assume no concessions and say nothing
Option A assumes no concessions and says nothing. That hides a data gap from the reader and is unsupported, since concessions may in fact exist.
Option C: Deduct an assumed 3% concession
Option C deducts an assumed 3% concession. An arbitrary percentage is not supported by evidence about the actual transaction.
Option D: Remove the sale from the report
Option D removes the sale from the report. Missing concession data does not by itself require dropping the comparable; the appraiser must explain why the data is unavailable.
Can't get it? Explain it
When concession data is blocked, the fix is disclosure, not assumption. Tell the reader why the information is missing.
How to use: Use this when a question asks what to do about unavailable comparable data.
Exam Tip
Choices that assume, invent or silently drop data are rarely the required response; look for the one that explains the limitation.
Common Mistakes to Avoid
- -Assuming no concessions without saying so
- -Applying an arbitrary concession percentage
- -Dropping the comparable instead of explaining the gap
Concept Deep Dive
Analysis
This question tests Fannie Mae's reporting requirement when concession data cannot be obtained. The appraiser cannot simply fill the gap with an assumption. Instead, the report must explain why the information is not available.
Background Knowledge
Sales and financing concessions can affect a comparable's price, so appraisers try to verify them. In some markets, disclosure limits make that information hard to get. Fannie Mae requires the appraiser to explain such gaps rather than guess.
Real-World Application
In a nondisclosure area, an appraiser cannot confirm whether a comparable's seller paid closing costs. The appraiser notes in the report that the concession data could not be obtained because of disclosure limits and explains the effort made to verify it.
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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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?