Which units of comparison are typical for single-family residential sales?
Correct Answer
D) Total price and price per square foot of GLA
For single-family residences the common units are the sale price of the total property and the sale price per square foot of gross living area. Per bed and per room suit hospitals and hotels, front foot suits vacant land, and cubic foot suits some industrial buildings.
Why This Is the Correct Answer
Option D is correct because the typical units of comparison for single-family residential dwellings are the sale price of the total property and the sale price per square foot of gross living area. These units reflect how homes are marketed and how buyers compare them.
Why the Other Options Are Wrong
Option A: Sale price per room and sale price per bed
Option A is wrong because sale price per room and per bed are units suited to properties such as hotels and hospitals, where revenue and use are tied to rooms or beds. They are not the typical units for single-family homes.
Option B: Sale price per front foot of the lot frontage
Option B is wrong because sale price per front foot of lot frontage is a unit used mainly for vacant land, where frontage drives value. It is not a typical unit for comparing single-family home sales.
Option C: Sale price per cubic foot of building volume
Option C is wrong because sale price per cubic foot of building volume suits some industrial buildings where ceiling height and volume matter. Single-family homes are not typically compared by cubic foot.
Match Unit to Buyer
Ask what the buyer is really paying for: a home buyer pays for the house and its living space, a hotel buyer for rooms, a land buyer for frontage.
How to use: Use this question to pick the unit of comparison for any property type on the exam.
Exam Tip
Link each unit to its property type: per room or bed for lodging and hospitals, per front foot for land, per cubic foot for some industrial, and total price or per square foot of GLA for houses.
Common Mistakes to Avoid
- -Using price per room for single-family homes
- -Applying a land unit like front foot to an improved house
- -Measuring price per square foot using total building area rather than gross living area
Concept Deep Dive
Analysis
This question tests matching units of comparison to property types. Different property types are priced in different units because buyers think about them differently. For single-family homes, buyers and appraisers look at the total price and the price per square foot of gross living area.
Background Knowledge
A unit of comparison breaks a sale price into a standard measure so properties of different sizes can be compared. The right unit is the one the market for that property type actually uses. Gross living area is the standard size measure for residential dwellings.
Real-World Application
An appraiser valuing a ranch house reviews five nearby sales. She compares their total prices and their price per square foot of gross living area to bracket the subject. She does not use price per room because local buyers do not price homes that way.
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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