Three adjusted indications are $412,000 with 5% gross adjustments, $405,000 with 22%, and $410,000 with 8%. With no further reliability evidence, what follows?
Correct Answer
D) Assess the evidence; gross percentages alone do not fix the weights
The percentages describe adjustment magnitude, not a complete reliability assessment. A small gross adjustment can reflect good comparability or omitted differences; a larger supported adjustment can still yield credible evidence. Examine transaction quality, comparability, adjustment support and applicability before assigning relative weight. These numbers alone do not fix the weights or make the $409,000 unweighted mean the only correct conclusion.
Why This Is the Correct Answer
Option D is correct because gross adjustment percentages describe how much adjusting was done, not the full reliability of each indication. Fannie Mae states it has no specific net or gross limits and that the number or amount of adjustments must not be the sole determinant of a comparable's acceptability. The appraiser should assess transaction quality, comparability and adjustment support, giving the greatest weight to the sales closest in comparability.
Why the Other Options Are Wrong
Option A: Their unweighted mean is the correct value conclusion
Option A is wrong because the unweighted mean, ($412,000 + $405,000 + $410,000) / 3 = $409,000, is not automatically the correct conclusion. Reconciliation should weigh each sale's reliability rather than default to an average.
Option B: The 22% case must be assigned zero weight in the final reconciliation
Option B is wrong because a 22% gross adjustment does not by itself require zero weight. A sale with larger but well-supported adjustments can still provide credible evidence.
Option C: The highest indication is proven to be the most recent and reliable one
Option C is wrong because the highest indication, $412,000, is not proven to be the most recent or reliable. Nothing in the stem gives sale dates, and a high figure says nothing about reliability.
Percentages hint, evidence decides
Gross percentages hint at comparability; the evidence behind each sale decides the weight.
How to use: Use this when a question tempts you to weight sales by adjustment percentages alone.
Exam Tip
Be cautious of answers that give a fixed weight or rejection rule based only on adjustment size; Fannie Mae does not set specific net or gross limits.
Common Mistakes to Avoid
- -Automatically discarding a sale with large gross adjustments
- -Using the unweighted mean as the final conclusion
- -Assuming a small gross adjustment proves strong comparability
Concept Deep Dive
Analysis
This question tests whether gross adjustment percentages alone determine reconciliation weights. A low gross percentage can mean good comparability or missed differences, and a higher one can still be well supported. The appraiser must evaluate the evidence behind each sale before weighting.
Background Knowledge
Reconciliation weighs indications by their comparability and the quality of the data and adjustments. Gross adjustment percentages are useful signals but can mislead if some differences were missed or if large adjustments are well supported. The goal is to give the most weight to the sales most similar to the subject.
Real-World Application
An appraiser has one sale with a 22% gross adjustment because it lacks a garage and has a smaller lot, both supported by paired sales. Another sale has only 5% gross but its condition could not be verified, so she weighs both based on the quality of their evidence.
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 comparable townhouse sold for $300,000. It needs +$34,000 for its smaller living area, −$27,000 for its superior location and −$4,000 for its newer roof, a net adjustment of +$3,000. The appraiser's draft comment calls it the most comparable sale because its net adjustment is 1% of its price. How should this sale's comparability be judged?
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