When selecting analytically meaningful units of comparison, which consideration is most relevant?
Correct Answer
A) Relevant market behavior and compatibility with the property and data
A meaningful unit should reflect how the relevant market compares properties and should be compatible with the data and appraisal problem. A lender may impose reporting fields without making that field the sole valuation basis. Do not choose a unit merely to maximize value or mechanically minimize dispersion; consistent definition and applicability also matter.
Why This Is the Correct Answer
Option A is correct because units of comparison should be selected based on what buyers and sellers typically use in the market for that property type, and they must be compatible with the subject and the data. A unit that reflects market behavior produces meaningful, consistent comparisons.
Why the Other Options Are Wrong
Option B: Whichever unit mechanically produces the narrowest spread
Option B picks whichever unit mechanically produces the narrowest spread. A tight range can be useful supporting evidence, but choosing a unit only to minimize dispersion ignores whether the market actually uses that unit and whether it fits the data.
Option C: Whichever software field is easiest to populate in the report form
Option C picks whichever software field is easiest to populate in the report form. A reporting field's convenience does not make it the analytical basis of value; the unit should reflect market behavior.
Option D: Whichever unit produces the highest subject indication
Option D picks whichever unit produces the highest subject indication. Selecting a unit to maximize value is outcome-driven and biased rather than grounded in how the market compares properties.
Speak the market's language
Choose the unit buyers and sellers actually talk in, such as price per acre for land or price per unit for apartments.
How to use: Use this when deciding which unit of comparison an exam answer supports.
Exam Tip
Eliminate answers that select a method because it produces a preferred number or is convenient; look for the answer tied to market behavior and data compatibility.
Common Mistakes to Avoid
- -Choosing the unit that gives the highest value
- -Choosing a unit only because it gives the tightest range
- -Using a unit buyers in that market do not use
Concept Deep Dive
Analysis
This question tests how an appraiser chooses units of comparison such as price per square foot or price per unit. The key is that the unit should reflect how the relevant market compares properties and should fit the property type and available data, not a desired outcome or reporting convenience.
Background Knowledge
Common units of comparison include price per square foot of living area, price per unit, price per room and price per acre. The appropriate unit depends on the property type and on how market participants make pricing decisions, and it must be defined and applied consistently across the comparables.
Real-World Application
Appraising a fourplex, an appraiser finds that local investors price small multifamily buildings per unit rather than per square foot. The appraiser analyzes sales on a price-per-unit basis, checking that the comparables' unit counts are defined the same way as the subject's.
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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What research typically lies behind each comparable sale that an appraiser finally selects?
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An appraiser is completing a retrospective appraisal of a house for an estate, with an effective date of March 1, 2026, the date of the owner's death. Comparable 3 went under contract on June 1, 2026, and closed on July 1, 2026, at $412,000. Paired resales of unchanged homes in the neighborhood show values rising at a simple rate of 0.5% per month from January through August 2026, while a county index for all property types rose 0.2% per month. The report is being written in November 2026. What is Comparable 3's time-adjusted price?