Which is insufficient by itself to establish that a sale is a suitable comparable?
Correct Answer
A) A similar tax assessment
An assessed value alone does not establish whether a sale competes with the subject or reflects its market. Tax records may provide useful property information, but comparable selection requires verified competitive characteristics, transaction details and relevant timing.
Why This Is the Correct Answer
Option A is correct because a similar tax assessment does not show that a sale competes with the subject or reflects its market. Assessed values may be based on different dates or methods, so they do not establish comparability. Tax records can supply property data, but selection rests on verified competitive characteristics and transaction details.
Why the Other Options Are Wrong
Option B: Verified competition for the same buyers
Option B, verified competition for the same buyers, is a core test of comparability because comparables should come from the same market as the subject. It is a valid basis for selection, so it is not the insufficient factor.
Option C: Verified relevant physical characteristics
Option C, verified relevant physical characteristics, reflects one of the primary elements of comparison. Similarity in physical characteristics supports selecting a comparable.
Option D: Verified transaction timing and terms
Option D, verified transaction timing and terms, covers market conditions and terms of sale, both primary elements of comparison. These details are needed to judge whether a sale is a suitable comparable.
Tax value isn't market proof
A matching tax bill tells you about the assessor's records, not whether buyers see the two homes as substitutes.
How to use: Use this when an option relies on assessed value to select or support a comparable.
Exam Tip
Note the word insufficient in the stem: choose the one factor that does not relate to the elements of comparison.
Common Mistakes to Avoid
- -Selecting comparables based on similar assessed values
- -Reading an insufficient question as asking for the best criterion
- -Ignoring transaction terms and timing when selecting comparables
Concept Deep Dive
Analysis
This question asks which factor alone is not enough to establish that a sale is a suitable comparable. Comparable selection depends on the primary elements of comparison, such as property rights, terms of sale, market conditions, location and physical characteristics. A tax assessment is not one of those elements.
Background Knowledge
Comparable sales should be similar to the subject in property rights conveyed, terms of sale, market conditions, location and physical characteristics. Assessed values are set for tax purposes and do not by themselves show market comparability.
Real-World Application
Two homes carry nearly the same assessment, but one is in a different school district and sold with seller financing. The appraiser rejects it as a comparable despite the matching assessments because it does not compete with the subject.
More Sales Comparison Questions
Market analysis confirms that seller financing at 3%, versus a 6% market rate, increased a comparable sale price. What adjustment removes that financing premium?
At the same effective date, reliable value indications support $800,000 for continued use of a property as improved and $500,000 for its cleared site. Immediate demolition costs $100,000. These are the only feasible alternatives, with no other costs or timing differences. Which alternative has the higher net value?
Other relevant conditions equal, growth in the number of households with effective purchasing power in a market tends to have which effect?
In a lakefront market, paired sales show that direct water frontage has the largest price effect of any feature. Which approach to comparable selection best follows from this evidence?
Which circumstance can cause highest and best use as improved to differ from highest and best use as though vacant?
A small group of buyers in a market looks for specialized features that are uncommon in the broader housing supply. What term describes this group?
A neighborhood analysis should include all of the following EXCEPT:
A site legally permits at most 40 units and can physically support 50. Supported comparable analyses find 30 and 40 units financially feasible, with 40 units producing the highest net land value after costs, timing and required return. Which use is maximally productive among these alternatives?
Market evidence isolates a subject value loss from off-site landfill odors. Which listed cause is an external-obsolescence influence?
Which proposed use cannot pass the legal-permissibility screen without evidence that the necessary permission is reasonably probable?
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
Market conditions adjustments are warranted by:
Next Question
Reliable engineering shows that a 10-acre site has a maximum physical capacity of 3 units per acre over the whole site. Zoning permits 4 units per acre, and no other constraint applies. What is the maximum number of units physically possible on the site?