Property Valuation
A Mississippi appraiser identifies a comparable sale that was a 'distressed sale' (foreclosure or short sale). This comparable requires:
ANo adjustment since all sales reflect market value
BCareful consideration and possible exclusion or adjustment — distressed sales may not represent arms-length market transactions✓ Correct
CAn automatic 20% upward adjustment
DDisclosure to MREC as a non-arms-length transaction
Explanation
Distressed sales (foreclosures, short sales, estate sales under pressure) may not represent arms-length market value transactions. Appraisers must carefully analyze whether these sales reflect motivated sellers acting under atypical conditions. Such sales may be excluded from the analysis or require specific market condition adjustments.
Related Mississippi Property Valuation Questions
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