Ranking analysis of single-family sales places the subject between Sale 4, which sold for $496,000, and Sale 2, which sold for $512,000. Sale 4 is slightly inferior, lacking the subject's updated primary bath. Sale 2 is substantially superior, with a finished basement and a larger lot; its seller had bought it for $380,000 in 2015. Which value is most consistent with this ranking?
Correct Answer
B) $499,000
The subject's value lies between $496,000 and $512,000, and because it differs only slightly from Sale 4 but substantially from Sale 2, it should fall close to $496,000; $499,000 fits. The $504,000 midpoint treats the two differences as equal, $509,000 reverses which sale is closer, and $496,000 adopts the inferior sale's price without crediting the subject's updated bath. The seller's 2015 purchase price says nothing about current value.
Why This Is the Correct Answer
Option B is correct because the subject is only slightly better than Sale 4 at $496,000 and substantially worse than Sale 2 at $512,000. Its value should sit just above $496,000, and $499,000 is the only choice that does.
Why the Other Options Are Wrong
Option A: $496,000
Option A, $496,000, is Sale 4's own price. Sale 4 lacks the subject's updated primary bath, so it is inferior and the subject's value should sit somewhat above $496,000.
Option C: $504,000
Option C, $504,000, is the midpoint of $496,000 and $512,000. A midpoint assumes the subject is equally far from both sales, but it is much closer to Sale 4.
Option D: $509,000
Option D, $509,000, sits near Sale 2's $512,000, which would mean the subject is only slightly inferior to Sale 2. Sale 2's finished basement and larger lot make it substantially superior.
Lean toward the closer sale
Within a bracket, the value leans toward the sale that differs least from the subject.
How to use: Use this when a stem says one bracketing sale is slightly different and the other very different.
Exam Tip
Do not default to the midpoint; read the wording on how much each sale differs and move the value toward the closer one.
Common Mistakes to Avoid
- -Using the midpoint of the bracket by default
- -Letting a seller's old purchase price influence the value
- -Concluding at the inferior sale's price instead of above it
Concept Deep Dive
Analysis
The question tests how the degree of difference positions the subject within its bracket. A ranking gives a range, and how much better or worse each bracketing sale is tells the appraiser which end the value sits near.
Background Knowledge
Bracketing establishes that the value falls between two sales, and the relative size of the differences locates it within that span. The indicated value should stay within the range of the comparables that support it; a seller's past purchase price is not evidence of current market value.
Real-World Application
An appraiser brackets a home between a sale missing only a bath update and a sale with a finished basement and larger lot. The appraiser reconciles near the lower sale and explains that the subject is closest to it in overall appeal.
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
A reviewer reads an appraisal of a 1920s bungalow in which differences in curb appeal, quality of finish, and street setting were analyzed by relative comparison rather than by dollar adjustments. Which content in the report lets the reviewer follow the appraiser's reasoning?
Next Question
A comparable property of 20,000 sf sold for a cash-equivalent price of $2,400,000. The subject contains 18,000 sf. The two properties match in property rights, market and method of measuring area, and market data show that the comparable's overall price per square foot applies to the subject. What value does this indicate for the subject?