The subject is a three-bedroom ranch home. For the 12 months before the effective date, the monthly median sale price of competing ranch homes stayed between $286,000 and $290,000, rising in some months and falling in others with no sustained direction. Two unchanged homes resold during the period, one $1,000 above and the other $500 below its earlier price. Comparable 3 went under contract at $292,000 seven months before the effective date. What market conditions adjustment is indicated for Comparable 3?
Correct Answer
D) None, because the market was stable over the period
A median price that moves within a narrow band with no sustained direction, together with resales that changed by small amounts in both directions, describes a flat or stable market, so no time adjustment is indicated for Comparable 3. The spread between monthly highs and lows is normal variation, not a trend; a comparable selling above the median reflects its own features, not market change; and one resale out of two does not establish a rising trend.
Why This Is the Correct Answer
Option D is correct because the medians stayed in a narrow band with no sustained direction and the two resales moved slightly in opposite directions. That evidence shows stable market conditions between the contract date and the effective date, so the supported time adjustment is zero.
Why the Other Options Are Wrong
Option A: Upward, by the $4,000 range of the monthly medians
Option A adds the $4,000 range between the highest and lowest monthly medians. That range is month-to-month noise with no direction, not a measured change in market conditions.
Option B: Downward, by the $2,000 its price exceeds the top median
Option B subtracts the $2,000 by which the $292,000 price exceeds the top median. A comparable's price above the median reflects its own characteristics, which property adjustments address, not a change in the market.
Option C: Upward, by the $1,000 gain on one of the resales
Option C adds the $1,000 gain on one resale. The other resale lost $500, so the pair shows no consistent direction, and picking one ignores the rest of the evidence.
Flat line, no time adjustment
If the trend wiggles but goes nowhere, the market is stable and the time adjustment is zero.
How to use: Use this when a trend is described in words rather than shown on a graph.
Exam Tip
Look for words like no sustained direction or within a narrow band; they describe a stable market, which indicates no time adjustment.
Common Mistakes to Avoid
- -Treating month-to-month noise as a trend
- -Adjusting a comparable to the median price
- -Relying on one resale while ignoring another
Concept Deep Dive
Analysis
The question describes in words what a flat trend line would look like and asks whether it supports a time adjustment. Random up-and-down movement around a level, confirmed by mixed resales, indicates stable conditions and no adjustment.
Background Knowledge
A market conditions adjustment is made only when the evidence shows market change between the comparable's contract date and the effective date. Stable conditions are a finding too, and the decision not to adjust also needs support from the data.
Real-World Application
An appraiser reviews a year of medians for ranch homes that bounce between $286,000 and $290,000. She reports a stable market, makes no time adjustments, and cites the medians and resales in the report.
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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