RAA Sales Comparison Approach 4

Question 1

When a seller contributes $10,000 toward the buyer's closing costs on a $250,000 sale, how should an appraiser typically treat this transaction?

Accepted Answer

Adjust the sale price downward by $10,000 to reflect the cash equivalent price of $240,000

Answer

Seller-paid concessions inflate the nominal sale price; the appraiser adjusts the comparable downward by the concession amount to arrive at the cash equivalent price.

Question 2

What is the primary reason an appraiser verifies comparable sales with buyers, sellers, or their agents?

Accepted Answer

To confirm the sale price, terms, and whether the transaction was arm's length

Answer

Verification confirms the accuracy of recorded sale data and reveals non-market conditions such as special financing, foreclosure, or family sales that would affect reliability.

Question 3

An appraiser finds that the subject property has a view of the ocean, but none of the comparable sales have an ocean view. How should the appraiser address this?

Accepted Answer

Extract a view premium from paired sales analysis or matched sales elsewhere and apply it as an adjustment

Answer

The appraiser should support the view adjustment through paired sales analysis or other market evidence to extract a credible dollar or percentage premium.

Question 4

In the sales comparison approach, 'reconciliation' refers to:

Accepted Answer

Analyzing the adjusted values of all comparables and weighting them to reach a single value conclusion

Answer

Reconciliation is the analytical process of weighing the adjusted values of comparables based on their relative similarity and reliability to arrive at a single value opinion.

Question 5

A comparable sale closed three months ago at $310,000, but the appraiser's analysis shows the market has appreciated 2% since then. What is the time-adjusted sale price?

Accepted Answer

$316,200

Answer

A 2% appreciation on $310,000 equals $6,200, so the time-adjusted price is $310,000 + $6,200 = $316,200.

(RAA) Certified Residential Accredited Appraiser Practice Test

(RAA) Certified Residential Accredited Appraiser Practice Test

RAA Sales Comparison Approach 4