What does verification of a comparable sale involve beyond confirming the price?
Correct Answer
D) Confirming terms, conditions of sale and the property
Investigate the price, financing and concessions, property characteristics, exposure and parties’ circumstances relevant to the comparison. Verification establishes what occurred and supports a judgment about market relevance; it is not merely confirming the recorded price or assuming that every transaction must prove arm’s-length. Any adjustment or exclusion must follow the verified circumstances and the applicable value definition.
Why This Is the Correct Answer
Option D is correct because verification involves confirming the terms, conditions of sale and the property's characteristics, not only the price. It includes financing and concessions, exposure and the parties' circumstances relevant to the comparison. Sales data should be confirmed by contacting buyers, sellers or other knowledgeable participants in the transaction.
Why the Other Options Are Wrong
Option A: Obtaining the seller's written consent to use it
Option A is wrong because obtaining the seller's written consent is not part of verifying a comparable sale. Appraisers use sale information without needing the seller's permission.
Option B: Establishing the appraiser's fee for the analysis
Option B is wrong because establishing the appraiser's fee is an engagement matter and has nothing to do with verifying a comparable sale.
Option C: Recording the names of all parties for the file
Option C is wrong because merely recording the names of all parties does not verify the sale. Verification is about confirming what occurred, including terms, conditions and property characteristics.
Price, terms, conditions, property
Verifying a sale means checking more than the price: the terms, the conditions of sale and the property itself.
How to use: Use this when a question asks what verifying a comparable sale includes.
Exam Tip
Pick the answer that broadens verification to terms, conditions and property characteristics. Administrative items like consent, fees or party names are distractors.
Common Mistakes to Avoid
- -Treating confirmation of the recorded price as full verification
- -Ignoring seller concessions and financing terms
- -Assuming every transaction must be proven arm's-length before use
Concept Deep Dive
Analysis
This question tests what comparable sale verification covers. Verification goes beyond the recorded price to confirm financing, concessions, conditions of sale and property characteristics. The goal is to understand what actually occurred so the appraiser can judge the sale's relevance and any needed adjustments.
Background Knowledge
Sale verification confirms the price, financing, concessions, conditions of sale and property data so the appraiser can determine whether a sale reflects the market and what adjustments apply. Verified circumstances then guide any adjustment or exclusion under the applicable value definition.
Real-World Application
A comparable sold at a strong price, but a call to the buyer's agent reveals the seller paid substantial closing costs and the home had a new roof not mentioned in the listing. The appraiser considers both facts when analyzing the sale.
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