What type of sale occurs when the buyer and the seller are unrelated and act without pressure?

• A. Arm's length transfer
• B. Non-arm's-length transfer
• C. Distressed sale
• D. Foreclosure sale

Answer: (A)

An arm's-length transfer is a sale between two parties who are unrelated and free to act in their own best interests, with no pressure or unusual motivations influencing the price. Because neither side has a power advantage or coercive reason to push terms, the transaction tends to reflect true market value. This is the type of sale appraisers rely on when selecting comparables for the Sales Comparison Approach, since it represents normal buyer and seller behavior.

In contrast, a non-arm's-length transfer involves related parties or influences that could skew price. A distressed sale happens when the seller is under pressure (financial need, time constraints), often yielding a below-market price. Foreclosure sales are forced by lenders through auctions or other processes, typically not reflecting typical market conditions. So the scenario described fits arm's-length transfer best.