Property Valuation
What does 'arm's length transaction' mean and why does it matter for appraisal comparables in Delaware?
AA transaction where buyer and seller are at least 3 feet apart during signing
BA transaction between unrelated, independent parties each acting in their own self-interest — the standard for valid market value comparables; transactions between related parties or under duress are not arm's length✓ Correct
CA transaction handled entirely by licensed attorneys in Delaware
DA transaction requiring both parties to be represented by real estate agents
Explanation
An arm's length transaction occurs between unrelated parties, each acting independently and in their own interest, without compulsion, undue influence, or special deals. Delaware appraisers use only arm's length transactions as market value comparables — transactions between relatives, distressed sales, foreclosures, and related-party deals are typically excluded or adjusted.
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