Under Fannie Mae's Selling Guide, a 95-year-old house is in a neighborhood where the predominant age is 15 years and the age range is 5 to 30 years. What must the appraiser do?
Correct Answer
A) Explain the age gap and comment on marketability and adjustments
When the subject's age is significantly different from the predominant age range, Fannie Mae requires the appraiser to explain why the age is outside the range and to comment on marketability and on the sales comparison adjustments made. The age range describes the neighborhood, so it is not stretched to fit the subject, and the predominant age is the most common age in the neighborhood. An age outside the range calls for explanation, not an automatic ineligibility finding.
Why This Is the Correct Answer
Option A is correct because Fannie Mae requires the appraiser to explain why the subject's age is outside the range and to comment on its marketability and on the adjustments made in the sales comparison grid. That keeps the neighborhood data accurate while addressing the subject's difference.
Why the Other Options Are Wrong
Option B: Widen the reported age range so that it includes the subject
Option B widens the age range to include the subject, but the range reflects the neighborhood's oldest and newest typical ages with isolated extremes excluded, not the subject's age.
Option C: Report the subject's own age as the predominant age instead
Option C reports the subject's age as the predominant age, but the predominant age is the most common age found in the neighborhood, which here is 15 years.
Option D: Treat the home as ineligible because its age does not conform
Option D treats the home as ineligible, but the guide's response to an age outside the range is explanation and analysis of marketability and adjustments, not a finding of ineligibility.
Odd age, explain the page
When the subject's age sticks out, the appraiser writes it up: why it differs, how it sells and how the grid handles it.
How to use: Use this when a question describes a subject much older or newer than its neighborhood.
Exam Tip
Neighborhood ranges describe the neighborhood; they are not adjusted to include the subject.
Common Mistakes to Avoid
- -Stretching the age range to include the subject
- -Confusing the subject's age with the predominant age
Concept Deep Dive
Analysis
The question tests what Fannie Mae requires when the subject does not fit the neighborhood's age profile. The answer is an explanation and analysis, not a change to how the neighborhood is described.
Background Knowledge
Fannie Mae's neighborhood section reports an age range and a predominant age, with isolated extremes excluded and the predominant age stated as a single whole number. A subject that differs significantly from these figures is not unacceptable by itself, but the difference must be explained and reflected in the analysis.
Real-World Application
An early farmhouse sits among tract homes built over the last 25 years. The appraiser reports the neighborhood's age range and predominant age as found, then explains the farmhouse's history, its market appeal and the condition and age adjustments in the grid.
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