A property sold for $400,000, with the seller agreeing to carry the financing for the buyer, at below-market terms. How is the appraiser most likely to get information regarding the details of the financing and its effect on the sale price?

• A. Verification with a party to the transaction
• B. Review of public records
• C. Appraiser's independent estimate
• D. Market data analysis

Answer: (A)

When financing details affect the sale price, the appraiser must obtain the exact terms from someone directly involved in the deal. Verifying with a party to the transaction—such as the seller or lender—provides the precise information about seller financing, including terms, interest rate, down payment, and any concessions that influenced the price. This direct verification lets the appraiser understand how the financing affected the sale price and whether adjustments to comparable sales are needed.

Public records may show the existence of a loan but often don’t reveal negotiated terms and concessions, and they can be incomplete. An independent estimate isn’t appropriate because it wouldn’t reflect the actual terms of this transaction. Market data analysis pulls broad trends and typical terms but doesn’t give the specific financing details of this sale.