A verified competitive sale genuinely needs no market-supported adjustments after all relevant factors are analyzed. How may it be treated?
Correct Answer
A) As potentially strong relevant evidence, with the analysis explained.
A genuinely well-verified competitive sale needing no supported adjustments can be strong evidence. Verify all relevant rights, terms, date and attributes; zero entries alone do not prove comparability or make every adjusted sale less reliable. No arbitrary minimum adjustment is required.
Why This Is the Correct Answer
Option A is correct because a verified competitive sale that genuinely needs no market-supported adjustments can be strong, relevant evidence. Fewer and smaller adjustments generally reduce the room for error when reconciling indications. The appraiser should explain that rights, terms, date and attributes were verified so readers understand why no adjustments were made.
Why the Other Options Are Wrong
Option B: Exclude it from the grid as suspicious evidence.
Option B is wrong because it excludes the sale from the grid as suspicious. A sale that is well verified and closely matches the subject is not suspicious simply because it needs no adjustments.
Option C: Force a minimum time adjustment even in a supported stable market.
Option C is wrong because it forces a minimum time adjustment even in a supported stable market. Time adjustments must be supported by evidence, and no arbitrary minimum adjustment is required.
Option D: Treat it as inferior because it has fewer grid entries.
Option D is wrong because it treats the sale as inferior for having fewer grid entries. Fewer adjustments usually make a sale more reliable, not less, when the sale has been properly verified.
Zero adjustments can mean best match
A verified sale that needs no adjustments is often the closest substitute, so it can carry strong weight.
How to use: Use this when reconciling grid indications and weighing comparables.
Exam Tip
Watch for options that penalize a sale for needing few adjustments or that require an adjustment without market support.
Common Mistakes to Avoid
- -Adding a token time adjustment in a stable market just to show an adjustment
- -Assuming a sale with no adjustments must be hiding something
- -Skipping verification because the sale looks identical
Concept Deep Dive
Analysis
This question tests how to treat a well-verified competitive sale that needs no supported adjustments. In reconciliation, the number and size of adjustments are relevant, so a sale needing none can be strong evidence. The appraiser should still explain the analysis and not force arbitrary adjustments.
Background Knowledge
In reconciling the sales comparison approach, appraisers consider the number of adjustments, any large adjustments, and gross adjustment for each comparable. A sale requiring little or no adjustment often deserves significant weight. Zero adjustments alone do not prove comparability, so verification and explanation remain essential.
Real-World Application
An appraiser finds a recent sale of the same model on the same street, with matching condition, verified conventional financing and a stable market. After checking each element, the appraiser concludes no adjustments are supported. The report explains the verification and gives this sale the most weight in reconciliation.
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?
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