Property Valuation
A Minnesota appraiser identifies that a comparable sale was a 'related party transaction' (sale between family members). How should this be treated?
AUsed as-is since all recorded sales are equally valid
BExcluded or used with great caution since it may not reflect true market conditions✓ Correct
CGiven extra weight since related parties know the true value
DReported to the county assessor as a potentially fraudulent sale
Explanation
Related party transactions (sales between family members, affiliated companies, etc.) may not reflect arm's-length market conditions and therefore may not represent true market value. Appraisers should investigate the circumstances of any sale before using it as a comparable. Related party sales that appear to be below or above market should be excluded or adjusted if used.
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