Which data should an appraiser obtain about a comparable sale’s transaction, as opposed to its property characteristics?
Correct Answer
A) Date of sale, sale price, financing terms and conditions of sale
Comparable data includes transaction data (date of sale, sale price, financing terms and conditions of sale) and data on locational, physical and economic characteristics. The other choices are property characteristics.
Why This Is the Correct Answer
Option A is correct because date of sale, sale price, financing terms and conditions of sale all describe the transaction. These items determine whether the sale price needs adjustment for market conditions, financing or atypical motivations.
Why the Other Options Are Wrong
Option B: Living area, room count, condition and quality of construction
Option B lists living area, room count, condition and quality of construction. These are physical characteristics of the property, not data about the sale transaction.
Option C: Lot size, view and distance to schools
Option C lists lot size, view and distance to schools. Lot size is a physical characteristic, and view and distance to schools are locational characteristics, so none describes the transaction.
Option D: Roof type, heating system and garage capacity
Option D lists roof type, heating system and garage capacity. These are physical features of the improvements rather than terms or circumstances of the sale.
Deal data versus house data
Ask whether the item describes the deal (when, how much, how financed, under what conditions) or the house and its setting.
How to use: Use this when classifying a data item as transaction or property characteristic.
Exam Tip
Transaction data answers questions about the sale, so items you could measure by visiting the property are property characteristics.
Common Mistakes to Avoid
- -Treating physical features as transaction data
- -Overlooking financing terms and conditions of sale when collecting data
- -Confusing locational characteristics with transaction elements
Concept Deep Dive
Analysis
This question tests the split between transaction data and property characteristic data for comparables. Transaction data describes the sale itself, while locational, physical and economic characteristics describe the property.
Background Knowledge
Comparable data includes information about the transaction and about the locational, physical and economic characteristics of the properties. Transaction elements such as financing terms, conditions of sale and market conditions are typically considered before property characteristics in the adjustment sequence. Collecting both types of data is needed to make supported adjustments.
Real-World Application
An appraiser verifying a comparable confirms the closing date, price, seller-paid financing concessions and that the sale was arm's length. Separately, the appraiser records the home's size, condition and location features for the physical and locational adjustments.
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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Previous Question
In a neighborhood where many homes are rented, an appraiser is valuing a house with central air conditioning. Two similar homes sold recently while rented: one for $360,000 (listed at $370,000) with rent of $2,000 per month, and one for $387,000 (listed at $397,750) with rent of $2,150 per month. Leases of otherwise similar homes show rent of $2,050 per month with central air and $1,975 without. Comparable 2, an otherwise similar sale, has no central air, and a contractor quotes $9,800 to install a system. What adjustment should be made to Comparable 2 for central air?
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