A clean paired sale is unavailable. What may support a feature adjustment?
Correct Answer
B) A supported analysis of market evidence, with its method explained.
Recognized statistical, cost-related or qualitative evidence may help when applicable and adequately supported. Merely disclosing a method does not establish market contribution, and depreciated cost is not automatically value. No universal hierarchy mandates paired sales before every other method.
Why This Is the Correct Answer
Option B is correct because adjustment rates can be determined through statistical analysis, modeling, paired sales or other commonly accepted methods. The report must summarize the supporting evidence and describe the data sources, tools and techniques used. A supported analysis of market evidence with its method explained meets that standard.
Why the Other Options Are Wrong
Option A: The appraiser’s personal preference alone, with no further support.
Option A, the appraiser's personal preference alone with no further support, is not evidence. Adjustments must rest on market evidence and an accepted method, not on preference.
Option C: An unverified agent opinion that is treated as conclusive evidence.
Option C, an unverified agent opinion treated as conclusive evidence, lacks verification and analysis. An opinion may be one input, but treating it as conclusive without support does not establish the adjustment.
Option D: A standard 5% adjustment applied to the unsupported feature difference.
Option D, a standard 5% adjustment applied to an unsupported feature difference, is a rule of thumb rather than market evidence. A fixed percentage without analysis does not show how the market values the feature.
Evidence plus explanation
A supported adjustment needs two parts: market evidence, and a clear account of how it was analyzed.
How to use: Use this when judging whether an adjustment is properly supported.
Exam Tip
Prefer answers that pair market evidence with a described method; reject answers that rely on preference, unverified opinion or fixed percentages.
Common Mistakes to Avoid
- -Believing paired sales are the only acceptable support
- -Relying on a fixed percentage without market analysis
- -Treating disclosure of a method as proof of the adjustment
Concept Deep Dive
Analysis
This question tests what can support a feature adjustment when a clean paired sale is not available. Paired sales are one accepted method among several. Reason through which option combines market evidence with an explained method.
Background Knowledge
Accepted methods for deriving adjustments include paired sales, statistical analysis, regression modeling, cost-related analysis and qualitative analysis. No single method must be tried first in all cases. Whatever the method, the report should summarize the evidence and explain how it was used.
Real-World Application
No paired sales exist to isolate the value of a three-car garage in the subject's market. The appraiser runs a regression on recent neighborhood sales, reviews the result for reasonableness, and describes the data and method in the report.
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?
Which of these is listed by Fannie Mae as a sales or financing concession?
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A $2,100 feature effect is supported only in a lower-price competitive segment, and the subject is verified to compete in another segment. What should be done before applying it?
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A comparable cash price is $520,000 six months before the effective date. Apply a supported SIMPLE, non-compounded monthly increase of 1.25% of original price. What signed time adjustment and adjusted price result?