An appraiser develops two analyses of the same sales for a 2,050-sf colonial. In the relative comparison, the subject is rated superior to Sale 2, which sold for $396,000, and inferior to Sale 3, which sold for $409,000, and the appraiser concludes $403,000. In the adjustment grid, however, Sale 2's adjusted price is $414,000, higher than both the conclusion and the price of Sale 3. What should the appraiser do next?
Correct Answer
D) Recheck Sale 2's adjustments and ratings to find the error
Two analyses of the same sales should agree in direction. The grid implies the subject is worth more than Sale 3, a sale the relative comparison ranks above the subject, so either an adjustment amount on Sale 2 or one of the ratings is wrong. The appraiser finds and corrects the error before reconciling. Splitting the difference, favoring the grid because it shows numbers, or reporting both results all leave the error in place.
Why This Is the Correct Answer
Option D is correct because a $414,000 adjusted price for Sale 2 implies the subject is worth more than Sale 3 at $409,000, yet the subject is ranked inferior to Sale 3. Either Sale 2's adjustments or the ratings are wrong, and the appraiser must find which before reconciling.
Why the Other Options Are Wrong
Option A: Conclude $408,500, midway between the two results
Option A concludes $408,500, midway between $403,000 and $414,000. Averaging two conflicting results keeps whatever error caused the conflict and produces a figure neither analysis supports.
Option B: Raise the conclusion to $414,000, since the grid is quantitative
Option B raises the conclusion to $414,000 because the grid is quantitative. A dollar figure is not more reliable when it contradicts the ranking; the grid may contain the unsupported adjustment.
Option C: Report both results and explain the difference between them
Option C reports both results and explains the difference. The difference points to an error in the analysis; reporting it without resolving it leaves the reader with an unsupported conclusion.
Two maps must agree
If two maps of the same town put the river in different places, one map is wrong; check both before you travel.
How to use: Use this when a grid result and a ranking point in different directions.
Exam Tip
When two analyses of the same sales conflict, choose the answer that finds the error, not one that averages, picks a side or reports both.
Common Mistakes to Avoid
- -Averaging conflicting results
- -Trusting a grid over a ranking because it shows dollars
- -Reporting a conflict without resolving it
Concept Deep Dive
Analysis
The question tests using relative comparison as a check on a quantitative grid. When the two analyses of the same sales conflict, the conflict signals an error in one of them, which must be found before any conclusion.
Background Knowledge
Relative comparison and quantitative adjustment are often used together on the same sales. Because both describe how each sale compares with the subject, they should agree in direction; a sale adjusted past a bracketing sale shows that an adjustment or a rating does not reflect the market.
Real-World Application
An appraiser's grid puts one sale's adjusted price above a sale ranked superior to the subject. Rechecking shows a garage adjustment entered twice; once corrected, the grid and the ranking agree.
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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Previous Question
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?
Next Question
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