An appraiser finds a comparable sale in the local MLS that was purchased by the seller's grandson. What should be done with this sale during verification?

Master the Mckissock General Appraiser Sales Comparison Approach Test with comprehensive quizzes and explanations. Enhance your skills in the appraiser profession and pass your exam with confidence!

Multiple Choice

An appraiser finds a comparable sale in the local MLS that was purchased by the seller's grandson. What should be done with this sale during verification?

Explanation:
When verifying comparables, sales need to reflect market value under arms-length conditions. A sale where the buyer is the seller’s relative is a related-party transaction, which can be influenced by personal relationships or other non-market factors. Because of that, it may not represent true market value. Therefore, this sale should be set aside rather than used to derive value. It should not be used as a primary comparable, and relying on it—even with adjustments—would risk distorted results. In practice, you’d exclude it from the verified set and seek other, truly arms-length sales to anchor the value.

When verifying comparables, sales need to reflect market value under arms-length conditions. A sale where the buyer is the seller’s relative is a related-party transaction, which can be influenced by personal relationships or other non-market factors. Because of that, it may not represent true market value. Therefore, this sale should be set aside rather than used to derive value. It should not be used as a primary comparable, and relying on it—even with adjustments—would risk distorted results. In practice, you’d exclude it from the verified set and seek other, truly arms-length sales to anchor the value.

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