For a Fannie Mae appraisal, what is the minimum number of closed comparable sales that must be reported in the sales comparison approach?
Correct Answer
D) Three
At least three closed comparables must be reported. Additional sales, contract offerings and listings may be added as support, but they do not replace the three closed sales.
Why This Is the Correct Answer
Option D is correct because Fannie Mae requires a minimum of three closed comparables to be reported in the sales comparison approach. Pending sales, active listings and additional closed sales may be included as further support. They supplement the three closed sales rather than replace them.
Why the Other Options Are Wrong
Option A: One, if it is a recent sale of the subject
Option A is wrong because one comparable, even a recent sale of the subject, does not meet the minimum of three closed comparables. A previously closed sale of the subject may be added as a fourth comparable or supporting data, but it does not count toward the required three.
Option B: Two, plus one active listing
Option B is wrong because two closed sales plus one active listing falls short of three closed comparables. A listing can support the analysis but cannot count toward the minimum.
Option C: Four, including a pending sale
Option C is wrong because four comparables including a pending sale overstates the minimum. Three closed sales are required, and a pending sale does not count as a closed one.
Three that have closed
The minimum is three comparables that have actually closed. Listings and pendings are extras, not substitutes.
How to use: Use this phrase when a question asks about the minimum comparable requirement for Fannie Mae appraisals.
Exam Tip
Check whether an answer counts listings or pending sales toward the minimum; only closed sales count.
Common Mistakes to Avoid
- -Counting active listings toward the three-sale minimum
- -Counting pending sales as closed comparables
- -Treating a prior sale of the subject as a substitute comparable
Concept Deep Dive
Analysis
This question tests a basic Fannie Mae requirement for the sales comparison approach. At least three closed comparable sales must be reported. Additional sales, contracts and listings may be added for support, but they do not replace the three closed sales.
Background Knowledge
Closed sales are the most reliable evidence of market value because the prices are confirmed transactions. Fannie Mae requires at least three, and appraisers may add listings and pending sales to show current market trends. Using more than the minimum can strengthen support when the market is changing.
Real-World Application
In a rural area with few sales, an appraiser finds three closed sales and two active listings. She reports all five, using the closed sales as the required comparables and the listings to show current asking prices.
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
Three adjusted indications are $412,000 with 5% gross adjustments, $405,000 with 22%, and $410,000 with 8%. With no further reliability evidence, what follows?
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