Freddie Mac Single-Family Seller/Servicer Guide 5605.2 — Definition of market value
Freddie Mac Single-Family Seller/Servicer Guide Section 5605.2 — Definition of market value.
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide 5605.2 — Definition of market value — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Single-Family Seller/Servicer Guide 5605.2 — Definition of market value
An appraisal must be based on the following definition of market value: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated 2. Both parties are well informed or well advised, and each is acting in what he or she considers his or her own best interest 3. A reasonable time is allowed for exposure in the open market 4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto, and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale *Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a Market Area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third-party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar-for-dollar cost of the financing or concession, but the dollar amount of any adjustment should approximate the market’s reaction to the financing or concessions based on the appraiser’s judgment. The market value estimate of the subject property must not include value assigned to furniture or any other personal property.
Operationalizing Freddie Mac Single-Family Seller/Servicer Guide 5605.2 — Definition of market value
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To work from the whole rulebook rather than this one page: download the corpus — every register on this site, verbatim, each with its source snapshot and effective date — then follow the methodology. It asks your assistant to answer only from the downloaded text, cite the register id and effective date it used, and tell you when the corpus does not cover something instead of filling the gap from memory. Running it locally also means no one sees which regulations you are looking at.
Source of record: https://claudeforcompliance.com/regs/fhlmc-5605-2/
· register fhlmc-5605-2 · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.