Which external factor does Fannie Mae specifically say should be considered when selecting comparables?
Correct Answer
C) The FEMA-designated flood zone
Fannie Mae says external factors, including the FEMA-designated flood zone, should be considered in selecting comparables, along with similar physical and legal characteristics.
Why This Is the Correct Answer
Option C is correct because Fannie Mae says external factors, including the FEMA-designated flood zone, should be given consideration when selecting comparables. Flood zone status can affect insurance costs and buyer demand. It is considered along with similar physical and legal characteristics.
Why the Other Options Are Wrong
Option A: The age of the listing agent’s firm
Option A, the age of the listing agent's firm, has no bearing on the property's value. It is a fact about a market participant's business, not an external factor affecting the property.
Option B: The comparable buyer’s occupation
Option B, the comparable buyer's occupation, is a personal characteristic of a buyer and is not an external factor for selecting comparables. Comparable selection focuses on property and market characteristics.
Option D: The color of the comparable’s exterior
Option D, the color of the comparable's exterior, is a minor cosmetic feature of the building itself, not an external factor. It is not what the guidance names for comparable selection.
Look outside the lot
External factors come from outside the property lines, like a flood zone map.
How to use: Use this when asked which external factor matters in comparable selection.
Exam Tip
Separate property and location influences from facts about agents, buyers or cosmetic details.
Common Mistakes to Avoid
- -Treating buyer characteristics as property factors
- -Overlooking flood zone status when selecting comparables
- -Confusing cosmetic features with external influences
Concept Deep Dive
Analysis
This question tests Fannie Mae's guidance on external factors in comparable selection. External factors are influences outside the property lines that can affect value. Identify the option that is a real external influence named in the guidance.
Background Knowledge
External factors are conditions outside a property that influence its value, such as flood zones, traffic, nuisances or nearby land uses. Comparables sharing the subject's external influences need fewer adjustments. Flood zone designation can affect insurance requirements and marketability.
Real-World Application
A subject sits in a FEMA-designated flood zone. The appraiser looks for comparables in the same flood zone where possible, because buyers in the area may pay less when flood insurance is required.
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
Four bungalows in the subject's neighborhood sold for $396,000 to $408,000. After the appraiser's adjustments for size, condition, garage and market conditions, their adjusted prices range from $378,000 to $431,000. What should the appraiser do next?
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Subject area is 1,900 sf. Which listed set contains sale areas both below and above that number?