Four closed sales are ranked from most to least desirable overall for a 2,180-sf two-story home that is currently listed for sale at $459,900: Sale 3, $471,000; Sale 1, $458,000; Sale 4, $446,500; Sale 2, $437,000. The subject is judged inferior to Sales 3 and 1 and superior to Sales 4 and 2. What value range does the ranking indicate for the subject?
Correct Answer
B) $446,500 to $458,000
The subject sits in the ranked array below the least desirable superior sale (Sale 1, $458,000) and above the most desirable inferior sale (Sale 4, $446,500), so the ranking places its value between $446,500 and $458,000. The $458,000 to $471,000 range is drawn toward the $459,900 asking price, which is not a closed sale and plays no part in the ranking. The full $437,000 to $471,000 range ignores where the subject actually falls in the array.
Why This Is the Correct Answer
Option B is correct because the subject is inferior to Sale 1 at $458,000 and superior to Sale 4 at $446,500, the two sales on either side of it in the array. Its value is therefore indicated between $446,500 and $458,000.
Why the Other Options Are Wrong
Option A: $437,000 to $446,500
Option A, $437,000 to $446,500, places the subject between Sale 2 and Sale 4, but the subject is superior to Sale 4, so its value should be above $446,500.
Option C: $458,000 to $471,000
Option C, $458,000 to $471,000, places the subject between the two superior sales, which would mean it is superior to Sale 1. The $459,900 listing price makes this tempting, but an asking price is not part of the ranked array.
Option D: $437,000 to $471,000
Option D, $437,000 to $471,000, is the full span of all four prices. It describes the data set but does not use the subject's position between Sale 1 and Sale 4.
Neighbors above and below
Picture the sales as rungs on a ladder; the subject stands on the step between the nearest rung above it and the nearest rung below it.
How to use: Use this when a question lists ranked sales and asks which range the subject falls in.
Exam Tip
Find the two sales adjacent to the subject in the ranking and read their prices; set aside listing prices and other figures that are not closed sales.
Common Mistakes to Avoid
- -Using the subject's asking price as a value anchor
- -Reporting the full range of all sales instead of the bracket around the subject
- -Placing the subject between two sales on the same side of it
Concept Deep Dive
Analysis
The question tests reading a ranked array: once each sale is judged superior or inferior overall, the subject's value lies between the lowest-priced superior sale and the highest-priced inferior sale. The subject's asking price is a distraction because it is not a sale and does not enter the ranking.
Background Knowledge
Ranking analysis is a qualitative technique: sales are arrayed by overall desirability, the subject is compared with each one, and its value is bracketed by the sales just above and below it. The result is a range rather than a point, which the appraiser then narrows with further analysis.
Real-World Application
An appraiser in a suburban tract has four recent sales of two-story homes but no reliable paired data. Ranking them by overall appeal shows the subject falls between a $458,000 sale and a $446,500 sale, giving a range the appraiser then refines.
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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