Which situation would most likely lead to disregarding a sale in the appraisal process?

• A. The sale is the highest priced among comparables
• B. The sale occurred within the same neighborhood
• C. The sale involves a related-party buyer or non-arm's-length conditions
• D. The sale occurred recently

Answer: (C)

In the sales comparison approach, you rely on arm's-length transactions—sales between unrelated buyers and sellers under typical market terms. When a sale involves a related-party buyer or non-arm's-length conditions, the price and terms can be influenced by personal relationships, control, or favorable arrangements that wouldn’t occur in a normal market. That distortion means the transaction may not reflect true market value, so it’s often disregarded as a comparable.

Other scenarios don’t automatically trigger disregard. A sale that is the highest price among comparables could still be useful after adjusting for differences. A sale in the same neighborhood is generally desirable for comparability, and a recently occurred sale helps reflect current market conditions (assuming no unusual terms).