In a 2015 study by Fannie Mae and the University of Cincinnati, what percentage range of appraised values were above the pending sale price?

• A. 40-50%
• B. 70-85%
• C. 55-70%
• D. 25-35%

Answer: (C)

Appraisal bias and how appraised value compares to the contract price is what this question probes. The 2015 study by Fannie Mae and the University of Cincinnati examined cases where there was a pending sale price and looked at how often the appraisal came in higher than that price. They found that a majority fell in the range of 55% to 70%, meaning more than half of appraisals were above the pending sale price. This indicates a notable upward tendency in valuations relative to the contract price, which can influence lending decisions and market dynamics. The other percentage ranges don’t match the study’s finding, so the range 55-70% is the correct one.