Which item is an example of a factor that affects the value and marketability of homes in a neighborhood?
Correct Answer
A) Access to public transportation
Fannie Mae lists factors such as proximity to employment and amenities, appeal to the market, changes in land use, access to public transportation and adverse environmental influences. Borrower, fee and loan details are not neighborhood factors.
Why This Is the Correct Answer
Option A is correct because access to public transportation is one of the neighborhood factors Fannie Mae lists as affecting value and marketability. It influences how convenient and appealing the location is to buyers. Other listed examples include proximity to employment and amenities and adverse environmental influences.
Why the Other Options Are Wrong
Option B: The borrower’s employment history
Option B is wrong because the borrower's employment history is a credit underwriting matter, not a neighborhood characteristic. It does not affect the value or marketability of homes in the area.
Option C: The appraiser’s fee for the assignment
Option C is wrong because the appraiser's fee for the assignment is a business term of the engagement. It has no bearing on the neighborhood's value or marketability.
Option D: The subject’s loan interest rate
Option D is wrong because the subject's loan interest rate is a financing detail of one transaction. It is not a neighborhood factor affecting homes in the area.
Neighborhood, not the loan file
Neighborhood factors are things a buyer sees around the house, like transit and amenities. Items from the loan file or the appraiser's invoice do not count.
How to use: Use this split to sort options into location factors and transaction or assignment details.
Exam Tip
Eliminate options that concern the borrower, the loan or the appraiser's business terms. The remaining location-based item is the neighborhood factor.
Common Mistakes to Avoid
- -Treating borrower characteristics as neighborhood factors
- -Confusing loan terms with location influences
- -Overlooking transportation access in neighborhood analysis
Concept Deep Dive
Analysis
This question tests recognition of neighborhood factors that affect value and marketability. Fannie Mae lists items such as proximity to employment and amenities, appeal to the market, changes in land use, access to public transportation and adverse environmental influences. Borrower, fee and loan details relate to the transaction or the assignment, not the neighborhood.
Background Knowledge
Neighborhood analysis identifies location factors that influence buyer demand, such as access to jobs, transportation, amenities and any adverse influences. These factors help explain value trends and support comparable selection and adjustments.
Real-World Application
An appraiser notes that a new light-rail station has opened near the subject neighborhood. The appraiser studies recent sales to see whether improved transit access has affected demand and prices.
More Market Questions
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