Which recent transfer should an appraiser treat with the greatest caution because it is most likely a non-arm’s-length transaction?
Correct Answer
C) A sale from a mother to her son at a discounted price after private negotiations
A sale between related parties at a discounted price raises a clear question about whether the transaction reflects normal market behavior. Non-arm’s-length transfers may be influenced by family relationships or business affiliations rather than open-market bargaining, which can make them weak evidence of market value.
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Rosa is preparing the sales comparison grid for a 1,900-square-foot subject property with no deck. Comparable Sale 1 sold for $412,000, has 2,000 square feet, and has a deck. Market data support a $40-per-square-foot adjustment for gross living area and an $8,000 adjustment for a deck. What is the comparable’s adjusted sale price?
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During training, Evan says that two pending sales and one active listing are enough to satisfy the comparable-sale requirement for a one-unit appraisal. Is Evan correct?