Under Fannie Mae Selling Guide B4-1.3-08 (Comparable Sales), a minimum of three closed (settled) comparables must be reported; contract offerings and current listings may be used only as supporting data. The subject is in a new (or recently converted) condo project, subdivision, or PUD with no settled sales inside because the subject transaction is among the first units to sell. Which statement correctly describes the Guide’s pending-sale exception?
Correct Answer
D) Two inside pendings for one inside sale, plus three outside settled sales
For the stated no-inside-settled-sale first-unit situation, the Guide permits two inside pending sales in lieu of one inside settled sale and also requires at least three outside settled comparables. This exception does not convert every pending contract into a closed sale or eliminate the outside evidence.
Why This Is the Correct Answer
Option D is correct because the Guide allows the appraiser to use two pending sales in the subject project, subdivision or PUD in lieu of one settled sale. It also requires at least three settled comparable sales from projects, subdivisions or PUDs outside the subject. Option D states both parts of that exception.
Why the Other Options Are Wrong
Option A: Three inside pending sales only, with no outside settled evidence at all
Option A says three inside pending sales only, with no outside settled evidence at all. The Guide requires at least three settled comparable sales from outside the subject project, so outside settled evidence cannot be dropped.
Option B: No inside pending sales may be used under any circumstances
Option B says no inside pending sales may be used under any circumstances, even here. The Guide's exception specifically permits two inside pending sales in lieu of one settled sale in this first-units situation.
Option C: One inside pending sale replaces all of the required settled comparables
Option C says one inside pending sale replaces all of the required settled comparables. The exception substitutes two pending sales for one settled sale and still requires at least three outside settled sales.
Two Pendings, Plus Three Closed
Two inside pendings count in place of one inside settled sale. Three settled sales from outside the project are still needed.
How to use: Use this count when a question asks about pending sales in a new project with no closings.
Exam Tip
Look for the answer that keeps the outside settled comparables. Options that drop all closed evidence or let one pending sale replace everything do not match the Guide.
Common Mistakes to Avoid
- -Relying only on pending sales without outside closed comparables
- -Treating one pending sale as equal to one settled sale
- -Believing pending sales can never be used in the sales grid
Concept Deep Dive
Analysis
This question tests the specific pending-sale exception in Fannie Mae B4-1.3-08 for new or recently converted projects, subdivisions or PUDs with no settled sales inside. In that situation the appraiser may use two pending sales inside the subject project in lieu of one settled sale. The appraiser must also use at least three settled comparable sales from outside the subject project, so the outside closed evidence remains required.
Background Knowledge
Fannie Mae generally requires at least three closed comparable sales, with contract offerings and listings used only as support. New projects present a problem when the subject is among the first units sold and no inside sales have closed. The pending-sale exception lets the appraiser reflect inside project pricing while keeping closed outside sales as the main support.
Real-World Application
An appraiser values one of the first units sold in a new condominium project where no units have closed. She uses two pending contracts in the project in lieu of one settled inside sale. She also includes three closed sales from competing projects nearby to support her opinion.
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