How does Fannie Mae allow an appraiser to use current listings and contract offerings in the sales comparison approach?
Correct Answer
B) As supporting data, if appropriate, in addition to closed sales
Contract offerings and current listings can be used as supporting data, if appropriate. They do not replace the three closed comparables, and asking prices are not closed transaction prices.
Why This Is the Correct Answer
Option B is correct because Fannie Mae states that contract offerings and current listings can be used as supporting data, if appropriate. They supplement closed sales rather than replace them. Asking prices are not closed transaction prices, which limits their weight.
Why the Other Options Are Wrong
Option A: As replacements for closed sales when the market is changing fast
Option A, using listings as replacements for closed sales when the market is changing fast, is wrong because Fannie Mae allows listings only as supporting data. They do not replace closed comparables.
Option C: As the primary indicator, because listings reflect current asking prices
Option C, treating listings as the primary indicator because they reflect current asking prices, is wrong because asking prices are not closed transaction prices. Listings play a supporting role.
Option D: They may not be reported anywhere in the appraisal report
Option D, saying listings may not be reported anywhere in the appraisal, is wrong because Fannie Mae allows contract offerings and current listings to be used as supporting data, if appropriate.
Closed leads, listings support
Closed sales carry the analysis; listings and pendings back them up.
How to use: Use this when asked how listings and pending sales fit into a lender appraisal.
Exam Tip
Reject options that let listings replace closed sales or that ban them entirely; the supported role is supplementary.
Common Mistakes to Avoid
- -Using listings instead of closed sales
- -Treating asking prices as equal to sale prices
- -Believing listings cannot appear in the report
Concept Deep Dive
Analysis
This question tests Fannie Mae's role for listings and pending contracts. Closed sales remain the core evidence, while current listings and contract offerings can add support. The answer is the one that uses them in addition to, not instead of, closed sales.
Background Knowledge
Closed sales show what buyers actually paid, so they are the primary evidence in the sales comparison approach. Pending sales and active listings can show current market direction and support conclusions. Fannie Mae permits their use as supporting data, if appropriate.
Real-World Application
In a rising market, an appraiser includes two pending sales after the three closed comparables. The pendings help show that prices are still increasing, supporting the time adjustment applied to the closed sales.
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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A property’s reported price is an allocation of a multi-property portfolio purchase. What must be investigated before using it as a comparable?
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