Newz: Arm’s Length, AMC Panel Requirements, Fed’s Influence on Mortgages
January 16, 2026
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: AMC Panel Requirements
- What Does Arm’s Length Mean in Real Estate?
- $329K California Cabin Has a Tree Growing Through Its Center: ‘Commune With Nature in a Whole New Way’
- How does the Federal Reserve affect mortgages?
- MY AD: What is new in the New URAR/UAD 3.6 SF-1 Scenario
- Critical Thinking Skills Needed by Appraisers By Vernon Martin
- Waste, Fraud & Abuse Flourished Under Former Secretary Fudge
- MBA: Mortgage applications increased 28.5 percent from one week earlier
Non-Arms Length Sales for Appraisers
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What Does Arm’s Length Mean in Real Estate?
Excerpts: As a real estate appraiser, understanding whether a transaction is an arm’s length sale or a non-arm’s length sale is crucial. Therefore, when evaluating the current terms of a sale or analyzing past sales of the subject property or comparables, it’s essential to consider the nature of the sale to ensure a credible appraisal.
A non-arm’s length sale is a transaction between parties who have a personal or professional connection, such as family, marriage, or work relationships. Due to their relationship, the parties might not act in their own best interests, which can result in a final sale price that does not reflect the property’s true market value.
Non-arm’s length transactions extend beyond the relationship between the buyer and seller; additional conditions must be considered to determine whether a transaction qualifies as an arm’s length transaction.
Example of a non-arm’s length transaction: An employer sells a property to an employee and agrees to pay 80% of the down payment for a mortgage loan, all the closing costs, the transfer tax, and any and all repairs up to $50,000 in the first 5 years of home ownership.
Example of a non-arm’s length transaction: An elderly couple sells their property to their next-door neighbor without fully understanding its market value, relying solely on the neighbor’s offer.
Example of a non-arm’s length transaction: An elderly couple sells their property to their next-door neighbor without fully understanding its market value, relying solely on the neighbor’s offer.
To read more and watch a 5 minute video, Click Here
My comments: Worth reading for all appraisers. I have never read a more comprehensive and understandable explanation of this very important topic.
When I have a sale that does not “look right” I always find out why it is high or low or has some other issue on “arms length”. If I can’t find out, I don’t use the sale.
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