For a Fannie Mae assignment using the legacy neighborhood-report format described in Selling Guide B4-1.3-03, which set identifies the primary neighborhood market-condition indicators?
Correct Answer
A) Property-value trend, property supply and marketing time
For the legacy Fannie report neighborhood section governed by the cited Guide, report value trend, supply and marketing-time indicators as of the effective date and support the analysis. These are separate indicators; an inventory duration does not mechanically determine marketing time. UAD 3.6 uses its applicable policy supplement.
Why This Is the Correct Answer
Option A is correct because Selling Guide B4-1.3-03 requires the appraiser to report the primary indicators of market condition for the subject neighborhood: the trend of property values, the supply of properties and marketing time. These are reported as of the effective date and must be supported.
Why the Other Options Are Wrong
Option B: Contract price, lender rate lock and loan-to-value ratio
Option B, contract price, lender rate lock and loan-to-value ratio, describes transaction and loan details. These are not the neighborhood market-condition indicators the guide lists.
Option C: An assessor land/building split and tax rate
Option C, an assessor land/building split and tax rate, is property tax information. It does not describe neighborhood value trend, supply or marketing time.
Option D: First-time-buyer status of the purchasers
Option D, first-time-buyer status of the purchasers, is a buyer characteristic. It is not one of the primary neighborhood market-condition indicators.
Trend, supply, time
The three neighborhood indicators are the value trend, the supply of properties and the marketing time. Think of the direction of prices, how much is for sale and how long it takes to sell.
How to use: Use this trio to rule out answers built on loan terms, taxes or buyer traits.
Exam Tip
Market-condition indicators describe the neighborhood market, not the loan or the buyer. Eliminate options that focus on financing or tax data.
Common Mistakes to Avoid
- -Treating loan-to-value or rate locks as market-condition indicators
- -Assuming months of inventory automatically sets marketing time
- -Reporting indicators without support as of the effective date
Concept Deep Dive
Analysis
This question tests knowledge of the neighborhood market-condition indicators reported under Fannie Mae Selling Guide B4-1.3-03 for the legacy report format. The guide lists three indicators: trend of property values, supply of properties and marketing time. The other options describe loan, tax or buyer data, not neighborhood market conditions.
Background Knowledge
In the legacy neighborhood section, the appraiser reports whether property values are increasing, stable or declining; whether supply is in shortage, in balance or over-supply; and the marketing time range. These are separate indicators, each needing support as of the effective date. An inventory measure does not mechanically determine marketing time.
Real-World Application
Completing the neighborhood section of a legacy report, an appraiser checks recent sales, current inventory and days on market. She marks values as stable, supply as in balance and marketing time as three to six months, and supports each with data.
More Market Questions
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Under USPAP Standards Rule 1-3(a), which item must an appraiser identify and analyze when necessary for credible results in a market value assignment?
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