The phrase 'terms of sale' refers to which aspects?

• A. The color of the house
• B. Price, financing, and other contractual terms
• C. The age of the seller
• D. The school district

Answer: (B)

Terms of sale describe the conditions under which a property is sold—the sale price, how the financing is arranged, and other contractual provisions such as concessions, contingencies, and who pays closing costs. These elements can change what the buyer actually pays and what the seller gives up, so they significantly affect how comparable sales are interpreted in the appraisal. For example, a sale that uses favorable financing or seller concessions may close at a higher or lower effective price than a cash sale, and adjustments are made in the Sales Comparison Approach to account for those differences. In contrast, the color of the house, the age of the seller, or the school district are characteristics of the property or its location, not the deal terms, so they don’t define terms of sale.