Applying no market conditions adjustment to comparables requires:
Correct Answer
C) Relevant evidence supporting no measurable adjustment over the interval
Support the conclusion that no measurable market-conditions adjustment is warranted over the relevant contract-to-effective-date interval. A client opinion or sale age alone is insufficient. Consider appropriate data quality and uncertainty rather than assume a mathematically exact flat market.
Why This Is the Correct Answer
Option C is correct because time adjustments, or the lack thereof, must be supported by evidence. The appraiser needs relevant market data showing no measurable change in market conditions over the interval. The validity of any adjustment, including a zero adjustment, rests mainly on the strength of the supporting data.
Why the Other Options Are Wrong
Option A: Agreement from the client that no adjustment is needed
Option A, agreement from the client that no adjustment is needed, substitutes the client's opinion for market evidence; the appraiser's conclusion must be supported independently by data.
Option B: A sale age under one year, without any other market evidence
Option B, a sale age under one year without any other market evidence, is wrong because sale age alone does not show that market conditions stayed the same; markets can change within a few months.
Option D: Each comparable having the same calendar sale month as the other comparable sales
Option D, each comparable having the same calendar sale month as the other comparables, says nothing about change between those sales and the effective date, which is the interval that matters.
Zero needs proof too
A zero time adjustment is a conclusion that needs market evidence, just like a positive or negative one.
How to use: Use this to reject answers that rely on client agreement or sale age alone.
Exam Tip
When an option relies on sale age, client opinion or matching dates instead of market evidence, it is unlikely to support a market-conditions conclusion.
Common Mistakes to Avoid
- -Assuming recent sales need no market-conditions analysis
- -Relying on client opinion about market trends
- -Treating a zero adjustment as needing no support
Concept Deep Dive
Analysis
This question tests the support needed for a market-conditions (time) decision. Choosing not to adjust is itself a conclusion and needs evidence, just like making an adjustment. The appraiser must show that relevant market data indicate no measurable change over the interval between the comparable's contract date and the effective date.
Background Knowledge
Market-conditions adjustments account for changes in prices between a comparable's contract date and the effective date of the appraisal. Data such as paired sales, resales, and price trend analysis can support either an adjustment or no adjustment. Fannie Mae requires support for time adjustments and for not making them.
Real-World Application
An appraiser uses comparables that sold four to eight months before the effective date. After reviewing median price trends and repeat sales in the segment, the appraiser finds no measurable change and explains that support for making no time adjustment.
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