What primarily supports relative weighting of comparable indications?
Correct Answer
B) Overall comparability, verified evidence and adjustment support.
Reconcile using overall relevance, verification and support for each comparable and its adjustments. Large adjustments warrant review but number or magnitude alone is not decisive. Proximity to a target contract price also does not establish reliability.
Why This Is the Correct Answer
Option B is correct because relative weighting rests on overall comparability, verified evidence and market support for the adjustments. The level of market support and the number and size of adjustments should be considered together, with no single factor deciding the weight.
Why the Other Options Are Wrong
Option A: Recency of the sale, ranked ahead of all of the other facts.
Option A ranks recency of sale ahead of all other facts. Recency is relevant, but it does not override comparability, verification and adjustment support.
Option C: The number clustered near a desired figure without reviewing relevance.
Option C weighs sales by how many cluster near a desired figure without reviewing relevance. Aiming at a desired figure is biased, and clustering alone does not show reliability.
Option D: Agreement with the subject’s contract price alone.
Option D weighs sales by agreement with the subject's contract price alone. Being close to a contract price does not establish that a comparable is reliable.
Similar, verified, supported
Give the most weight to sales that are most similar, best verified and best supported in their adjustments.
How to use: Use this to judge any answer about how to weight comparables.
Exam Tip
Answers that rely on one factor alone, or on reaching a target figure, do not describe sound reconciliation.
Common Mistakes to Avoid
- -Giving the most weight to the newest sale regardless of comparability
- -Favoring indications that match the contract price
- -Weighting by clustering toward a desired value
Concept Deep Dive
Analysis
This question tests the basis for weighting comparables during reconciliation. Weight should reflect each comparable's overall comparability, the quality of its verification and the market support for its adjustments. Single factors such as recency, clustering or agreement with the contract do not by themselves justify weight.
Background Knowledge
Reconciliation is not simple averaging; the appraiser explains why some comparables deserve more weight. Key factors include similarity to the subject, verification of the sale and the market support for adjustments. Large or numerous adjustments call for closer review but are not decisive by themselves.
Real-World Application
Of three comparables, the oldest sale is the most similar, was verified with the buyer's agent and needs only small supported adjustments. The appraiser gives it the most weight despite its age and explains why.
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
Over the past two months, mortgage rates in a suburban market have risen sharply. The closed sales the appraiser has found for a split-level subject all went under contract three to five months ago. Interviews with agents active in the neighborhood describe fewer offers and recent contracts at prices below those earlier sales. How should the appraiser use the interviews?
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