Which term describes a sale where the buyer and the seller are not related and act independently?

• A. Distressed sale
• B. Foreclosure sale
• C. Arm's length transfer
• D. Quick sale

Answer: (C)

An arm's-length transfer describes a sale where the buyer and seller are not related and act independently, with no pressure or influence from personal interests. This independence helps ensure the price reflects fair market value rather than something tied to a relationship or coercion, which is why it’s the standard for comparing similar properties in the Sales Comparison Approach. Distressed sales involve seller financial pressure and typically yield below-market prices; foreclosure sales are lender-driven and often occur at auction under less favorable conditions; a quick sale emphasizes speed and may or may not be arm’s length, but the defining feature of arm’s length is the lack of relationship and independent bargaining.