For a market value appraisal, what subject-property history must an appraiser analyze under USPAP when the information is available in the normal course of business?
Correct Answer
A) Current agreements, options and listings, plus three years of sales
SR 1-5 requires analysis of current agreements of sale, options and listings of the subject, and of all sales of the subject within the three years before the effective date, when the information is available in the normal course of business.
Why This Is the Correct Answer
Option A is correct because USPAP Standards Rule 1-5 requires analysis of all agreements of sale, options and listings of the subject current as of the effective date. It also requires analysis of all sales and other transfers of the subject within the three years prior to the effective date. Both apply when the information is available in the normal course of business.
Why the Other Options Are Wrong
Option B: Sales of the subject within one year before the date of the report
Option B is wrong because sales within one year before the date of the report use both the wrong period and the wrong reference date. USPAP requires three years measured from the effective date of the appraisal.
Option C: The subject’s most recent listing, whenever it occurred
Option C is wrong because only the subject's most recent listing, whenever it occurred, is not the requirement. USPAP requires current agreements, options and listings plus sales and transfers within the prior three years.
Option D: All sales of the subject since the house was first built in the area
Option D is wrong because all sales since the house was first built goes beyond the requirement. The USPAP lookback for sales and transfers is three years before the effective date.
Now plus three
Analyze what is happening now (current agreements, options, listings) plus three years of prior sales and transfers. Count back from the effective date.
How to use: Use Now plus three to recall the subject history requirement for market value appraisals.
Exam Tip
Watch for distractors that swap the effective date for the report date or change the three-year period.
Common Mistakes to Avoid
- -Measuring the lookback from the report date instead of the effective date
- -Using a one-year period instead of three years
- -Analyzing prior sales but overlooking current listings and options
Concept Deep Dive
Analysis
This question tests the USPAP requirement on subject sales and listing history in a market value appraisal. The appraiser must analyze current agreements of sale, options and listings, plus all sales and transfers in the three years before the effective date, when available in the normal course of business. The key details are the three-year lookback and the effective date as the reference point.
Background Knowledge
The subject's recent sales and listing history can reveal price trends, motivations or problems relevant to value. USPAP sets a minimum analysis requirement that applies when the data are available in the normal course of business. The effective date, not the report date, anchors the lookback period.
Real-World Application
An appraiser finds the subject sold 26 months before the effective date and is currently under contract. She analyzes both the prior sale and the current agreement and reconciles any difference with her value opinion.
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?
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