Whenever possible, with whom should an appraiser verify a comparable sale?
Correct Answer
C) With the buyer, the seller or an agent of either
Sales data should be verified, whenever possible, with the buyer, the seller or an authorized agent of either, who know the actual price, terms and conditions. Public records and other parties may not reveal concessions or motivations.
Why This Is the Correct Answer
Option C is correct because, whenever possible, sales data should be verified with the buyer, the seller or an authorized agent of either. These parties have direct knowledge of the actual price, financing terms, concessions and conditions of sale. That knowledge lets the appraiser judge whether the sale is a reliable market indicator.
Why the Other Options Are Wrong
Option A: With the county tax assessor’s office and no one else
Option A, the county tax assessor's office and no one else, is wrong because public records may not reveal concessions, motivations or special terms. Records are useful, but limiting verification to them skips the best sources, the parties and their agents.
Option B: With the lender that ordered the subject appraisal
Option B, the lender that ordered the subject appraisal, is wrong because that lender was not a party to the comparable's sale and has no direct knowledge of its terms. The client for the subject appraisal is not a verification source for other transactions.
Option D: With a neighbor who lives close to the comparable
Option D, a neighbor who lives close to the comparable, is wrong because a neighbor typically has secondhand information at best. A neighbor does not know the actual price, terms or conditions the way the buyer, seller or their agents do.
Ask who signed
The people on the contract, the buyer and seller, and their agents know the real deal.
How to use: Use this when choosing the best source to confirm a comparable's price and terms.
Exam Tip
Pick the parties to the transaction or their authorized agents over public records, clients or bystanders when the question asks for the preferred verification source.
Common Mistakes to Avoid
- -Relying only on public records to verify a sale
- -Treating the subject's lender as a source for comparable data
- -Accepting secondhand neighborhood reports as verification
Concept Deep Dive
Analysis
This question tests who is the best source for verifying a comparable sale. The parties to the transaction or their authorized agents know the real price, terms and conditions. Other sources may miss concessions or the motivations behind the sale.
Background Knowledge
Sale verification confirms the price, date, financing, concessions, property condition and motivations behind a transaction. Information from the parties or their agents helps reveal conditions that recorded documents may not show. Verified data support decisions about whether a sale is usable and what adjustments it needs.
Real-World Application
A comparable's recorded price looks high for its area. The appraiser calls the listing agent, who confirms the seller paid a large share of the buyer's closing costs. The appraiser then makes a supported concession adjustment that public records alone would have missed.
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?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Previous Question
In a non-agency assignment, an appraiser's analysis points to a value below every adjusted comparable price. What is required before reporting that conclusion?
Next Question
Comparable sales are scarce in the subject’s neighborhood, so the appraiser uses sales from a competing neighborhood. What does Fannie Mae prohibit in this situation?