The subject property is a 1960s ranch house in a suburban neighborhood where several homes have owned rooftop solar systems. Few recent sales isolate the effect of the panels. The appraiser wants to learn how buyers in this neighborhood react to owned solar systems. Which source is best placed to provide that information?
Correct Answer
B) Agents who have recently listed and sold homes in the neighborhood
Adjustments must reflect how typical buyers in the market react to a feature, so the most useful interviews are with participants who see that reaction directly: agents who have recently marketed and sold homes in the segment. The subject owner knows the system's cost, not what buyers will pay for it, and has an interest in the result. The installer knows cost and output, and the loan officer has no direct knowledge of buyer behavior in the neighborhood.
Why This Is the Correct Answer
Option B is correct because agents who have recently listed and sold homes in the neighborhood observe how buyers respond to owned solar systems in showings, offers and final prices. Their experience bears on the market's reaction, which is what a market-based adjustment must reflect.
Why the Other Options Are Wrong
Option A: The subject owner, who paid for the system and knows its cost
Option A is wrong because the subject owner knows what the system cost to install, and cost is not the same as what buyers will pay for it. The owner also has a stake in a higher value, so the owner's view is weak evidence of buyer reaction.
Option C: The contractor that designed and installed the subject's system
Option C is wrong because the installing contractor can describe the system's cost, size and energy output but does not take part in home sales and does not see how buyers price the feature.
Option D: The loan officer who ordered the appraisal for the lender
Option D is wrong because the loan officer who ordered the appraisal has no direct role in neighborhood home sales and is not a source on how buyers there react to solar systems.
Ask who watches buyers decide
The best interview source is the person who sees buyers make offers in that segment, not the person who paid for or built the feature.
How to use: Use this when a question asks which party can explain how the market reacts to a feature.
Exam Tip
When options include an owner, a builder or a lender, look for the participant active in recent sales of similar homes in the same market.
Common Mistakes to Avoid
- -Treating the owner's installation cost as the buyer's reaction to the feature
- -Relying on a party who has no direct role in sales in the market segment
Concept Deep Dive
Analysis
The question tests which market participant can speak to buyer behavior, which is what an adjustment must measure. The reasoning is to separate people who know what a feature cost from people who watch buyers respond to it in negotiations.
Background Knowledge
Interviews with market participants are a recognized way to understand market behavior when sales data alone do not isolate a feature. The value of an interview depends on the person's direct, recent involvement in transactions in the same market segment and on the absence of a stake in the outcome.
Real-World Application
An appraiser valuing a ranch house with owned solar panels finds only two sales with panels. She calls three agents who sold homes in the subdivision during the past year to ask how buyers treated the panels in their offers, and records their answers in her workfile.
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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