In the Census Bureau’s new residential sales statistics, when is a new house counted as sold?
Correct Answer
C) When a sales contract is signed or a deposit accepted
A house is considered sold when either a sales contract has been signed or a deposit accepted, even before construction starts; the survey does not follow the transaction through closing.
Why This Is the Correct Answer
Option C is correct because the Census Bureau considers a new house sold when either a sales contract has been signed or a deposit accepted. This can occur even before construction starts, and the survey does not follow the transaction through closing.
Why the Other Options Are Wrong
Option A: When the deed is recorded with the county after closing
Option A, when the deed is recorded after closing, describes a later step in the transaction. The Census definition counts the sale earlier, at contract signing or deposit acceptance.
Option B: When the local certificate of occupancy is issued
Option B, when the certificate of occupancy is issued, relates to completion of construction. A house can be counted as sold before construction even starts, so occupancy approval is not the trigger.
Option D: When the buyer’s mortgage loan is funded at closing
Option D, when the buyer's mortgage is funded at closing, is a closing event. The Census statistic counts the sale at contract or deposit, before closing.
Census counts the handshake
For new-home sales, the Census counts the sale at the handshake, a signed contract or accepted deposit, not at the closing table.
How to use: Use this image when a question asks which event triggers a Census new-home sale.
Exam Tip
Distinguish contract-based statistics from closed-sale statistics; they measure different points in the transaction.
Common Mistakes to Avoid
- -Assuming Census new-home sales are counted at closing
- -Confusing certificate of occupancy with the sale date
- -Treating contract-based and closed-sale statistics as interchangeable
Concept Deep Dive
Analysis
This question tests the Census Bureau's definition of when a new house is counted as sold. The statistic uses an early event in the transaction, the signed contract or accepted deposit, rather than closing or recording. Choose the option matching that definition.
Background Knowledge
New residential sales statistics measure contract activity for newly built homes, so they reflect demand earlier than closed-sale data. Appraisers using these figures should recognize that they are contract-based and can differ from closed-sale counts in local records.
Real-World Application
An appraiser compares national new-home sales figures with local closed-sale data and sees timing differences. She explains that the Census counts contracts and deposits, so it can lead closed-sale data.
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