Which evidence most directly helps verify the actual price and material terms of a particular closed sale?
Correct Answer
D) A reliable closing statement confirmed with a party to the sale
A closing statement and a knowledgeable transaction participant provide direct transaction evidence, subject to checking their reliability and consistency. An AVM estimate, assessed value, and asking price answer different questions and do not establish what was actually paid. Deeds and public records can be useful, but their disclosure of consideration and terms varies; no document label alone guarantees complete verification.
Why This Is the Correct Answer
Option D is correct because a reliable closing statement confirmed with a party to the sale is direct evidence of the price and material terms. Sales and financing data should come from parties associated with the transaction, such as the broker, buyer or seller, or a reliable data source. The appraiser still checks the reliability and consistency of what is obtained.
Why the Other Options Are Wrong
Option A: An online automated estimate of the property’s current value
Option A, an online automated estimate of the property's current value, is a model's opinion of value. It does not show what was actually paid or the terms of the sale.
Option B: The assessor’s current assessed value for the property on the roll
Option B, the assessor's current assessed value on the roll, is a value for tax purposes. It does not establish the price or terms of a particular closed sale.
Option C: The original asking price of an active listing in the neighborhood
Option C, the original asking price of an active listing in the neighborhood, concerns a different property that has not sold. It says nothing about the price paid in the sale being verified.
Ask the people who closed
To verify a sale, go to the closing documents and the people who were part of the deal.
How to use: Use this rule when choosing the best source to confirm price and terms.
Exam Tip
Separate value opinions such as AVMs and assessments from transaction evidence; only transaction evidence verifies what was paid.
Common Mistakes to Avoid
- -Using an assessed value as evidence of a sale price
- -Relying on an AVM to verify a closed sale
- -Assuming public records always disclose concessions
Concept Deep Dive
Analysis
This question tests which evidence directly verifies the actual price and terms of a closed sale. Direct transaction evidence, such as a closing statement confirmed with a party to the sale, answers what was actually paid and on what terms. Estimates, assessments and asking prices answer different questions.
Background Knowledge
Verification confirms the sale price, financing, concessions and conditions of sale. Closing documents and conversations with knowledgeable participants are strong sources. Deeds and public records can help, but how much they disclose about consideration and terms varies, so no document label alone ensures complete verification.
Real-World Application
An appraiser calls the listing agent of a comparable and obtains the closing statement, which shows a seller credit toward closing costs. The appraiser adjusts for the concession that public records did not reveal.
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