Under Fannie Mae's Selling Guide, Comparable X sold 1 month ago for $480,000 with adjustments of +$28,800, -$19,200, +$14,400 and -$9,600. Comparable Y sold 9 months ago for $470,000 and needs one supported time adjustment of +$14,100. All adjustments are equally well supported and the sales are otherwise similar. Which is the stronger indicator?
Correct Answer
D) Comparable Y, because its 3.0% gross adjustment is well below Comparable X's 15.0%
Comparable X nets +$14,400 (3.0%) but its gross adjustment is $72,000, or 15.0% of $480,000; Comparable Y nets and grosses $14,100, or 3.0% of $470,000. With equal support, the sale needing far less total change is the better indicator, and the Selling Guide gives this very example: a nine-month-old sale with a time adjustment may be more appropriate than a one-month-old sale that requires multiple adjustments. Equal net percentages hide the difference, and recency alone does not outweigh much larger total adjustment.
Why This Is the Correct Answer
Option D is correct because Comparable Y's gross adjustment is $14,100 / $470,000 = 3.0%, while Comparable X's is $72,000 / $480,000 = 15.0%. With equal support, the sale requiring much less total change is the stronger indicator, as the Selling Guide's nine-month-old sale example recognizes.
Why the Other Options Are Wrong
Option A: Comparable X, because a 1-month-old sale outweighs its 15.0% gross adjustment
Option A lets the 1-month sale date outweigh X's 15.0% gross adjustment. The Guide says a nine-month-old sale with a time adjustment may be more appropriate than a recent sale needing multiple adjustments, and Y's time adjustment is supported.
Option B: Neither over the other, because each shows a net adjustment of 3.0% of price
Option B treats the sales as equal because each nets 3.0% ($14,400 / $480,000 and $14,100 / $470,000). Net figures let X's adjustments offset; gross figures of 15.0% versus 3.0% show X needed five times as much change.
Option C: Comparable X, because its four adjustments offset to a small net of 3.0%
Option C favors X because its adjustments offset to a 3.0% net. Offsetting adjustments do not make a sale more similar; X still required $72,000, or 15.0%, of total adjustment.
Fewer changes beat fresher dates
A supported time adjustment fixes an old date in one step. Many physical adjustments add more room for error.
How to use: Use this when a question pits a very recent but dissimilar sale against an older, closely similar one.
Exam Tip
When net percentages match, compare gross percentages before deciding which sale is more reliable.
Common Mistakes to Avoid
- -Assuming the most recent sale is the best comparable
- -Judging comparability by net adjustment alone
Concept Deep Dive
Analysis
The candidate must compute net and gross percentages for both sales and then judge which matters for reliability. Net figures are identical, so only the gross figures separate the sales, and the Guide confirms that an older sale with one adjustment can beat a recent sale with many.
Background Knowledge
Recency is one element of comparability, but a supported time adjustment can account for an older sale's date. When a recent sale differs from the subject in several ways, its many adjustments can make it a weaker indicator than an older, more similar sale.
Real-World Application
In a subdivision with few recent sales, an appraiser chooses a nearly identical model that sold nine months ago over a recent sale with different size, condition and garage. The report explains the supported time adjustment and why the older sale received more weight.
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