Which fact most directly warrants investigating atypical seller motivation?
Correct Answer
D) A verified compulsory liquidation deadline materially shorter than normal market exposure.
The stipulated compulsory deadline warrants examining whether atypical motivation affected price. A divorce, court order or short period alone does not quantify a discount, and ordinary deposit/exposure labels do not prove all terms are market based. Verify the specific sale.
Why This Is the Correct Answer
Option D is correct because a verified compulsory liquidation deadline materially shorter than normal market exposure suggests the seller was under pressure to sell. Forced liquidation is defined by a sale with less than a reasonable period of market exposure. This fact warrants investigating whether atypical motivation affected the price, though it does not by itself quantify a discount.
Why the Other Options Are Wrong
Option A: An otherwise ordinary 60-day exposure period that has been stipulated as typical for the market.
Option A is wrong because a 60-day exposure period stipulated as typical for the market does not signal atypical motivation. Normal exposure points toward ordinary market behavior, not seller pressure.
Option B: A relocation sale on the stipulated normal timeline.
Option B is wrong because a relocation sale on the stipulated normal timeline does not by itself indicate atypical motivation. Relocation alone is not pressure when the seller still allowed normal exposure.
Option C: A standard 3% deposit with otherwise normal terms.
Option C is wrong because a standard 3% deposit with otherwise normal terms is ordinary. A typical deposit does not signal a distressed or unusually motivated seller.
Short clock, check motivation
When a seller had to sell faster than normal exposure allows, investigate whether pressure lowered the price.
How to use: Use this to spot which sale facts call for conditions-of-sale analysis.
Exam Tip
Pick the option that shows a material departure from normal market exposure or terms, not one that is described as typical.
Common Mistakes to Avoid
- -Assuming any relocation sale is distressed
- -Applying a fixed discount just because a sale was compulsory
- -Overlooking a short exposure period when verifying a sale
Concept Deep Dive
Analysis
This question tests recognizing facts that suggest atypical seller motivation. A sale with less than a reasonable period of market exposure is a hallmark of forced liquidation. The appraiser looks for the option that most directly signals pressure on the seller.
Background Knowledge
Market value assumes typically motivated parties and reasonable market exposure. Sales made under compulsion or with too little exposure may sell below market. Appraisers verify each sale's circumstances rather than assuming a discount from a label alone.
Real-World Application
An appraiser learns a comparable was sold under a court-ordered deadline that allowed only two weeks of marketing, far shorter than the typical exposure. The appraiser contacts the parties and reviews the listing history to see whether the price reflected seller pressure. The sale's weight or adjustment depends on what the verification shows.
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 market where sellers customarily pay a 1% loan origination fee for buyers, a comparable seller paid no fees or concessions. How does Fannie Mae view this sale?
Next Question
A comparable’s $420,000 price expressly equals 105% of its supported price in the subject’s location, with all else unchanged. What subject-location-equivalent price removes that premium? Do not deduct 5% of the already higher amount.