What minimum amount of data must support the property value trend (increasing, stable, declining) reported in a Fannie Mae neighborhood section?
Correct Answer
D) At least 12 months of data
The trend reported must reflect the overall movement of the market based on a minimum of 12 months of data, using factual sources such as market data, home price indices, MLS and public records.
Why This Is the Correct Answer
Option D is correct because Fannie Mae requires that the trend indicated in the appraisal report reflect the overall movement of the market based on a minimum of 12 months of data. A shorter window may not show the overall trend.
Why the Other Options Are Wrong
Option A: Three months of closed sales
Option A, three months of closed sales, is shorter than the minimum of 12 months of data Fannie Mae requires for the reported trend.
Option B: Six months of listings
Option B, six months of listings, is both shorter than the required 12 months and limited to listings, which do not by themselves show the overall movement of the market.
Option C: The two most recent quarters
Option C, the two most recent quarters, covers only six months, which falls short of the minimum of 12 months of data required.
A full year for the trend
One full year of data, at minimum, is needed to report the neighborhood value trend.
How to use: Use this to recall the minimum data period for the trend box.
Exam Tip
When a question asks for a minimum data period for the neighborhood trend under Fannie Mae, look for 12 months.
Common Mistakes to Avoid
- -Basing the trend only on the most recent few months
- -Using listings alone to set the trend
- -Confusing short-term market activity with the overall trend
Concept Deep Dive
Analysis
This question tests a specific Fannie Mae requirement for the neighborhood property value trend. The reported trend must reflect overall market movement based on at least 12 months of data.
Background Knowledge
The neighborhood section reports whether property values are increasing, stable or declining. Fannie Mae expects this conclusion to rest on factual data such as market data, home price indices, MLS and public records covering at least a year, which helps smooth out short-term or seasonal swings.
Real-World Application
An appraiser notices strong price gains in the last quarter but flat prices over the prior nine months. Reviewing 12 months of MLS and public-record data, the appraiser reports the overall trend based on the full year rather than the recent spike.
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?
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