Sales Validation Codes

Overview of Real Estate Sales Validation Codes

The provided document outlines a standardized system for classifying real estate sales based on their validity and specific characteristics. These codes are used to determine if a transaction represents a true market value or if it should be excluded from standard market analysis due to unique circumstances.

The system distinguishes between sales that are valid, invalid, or require further research, utilizing specific codes for both general analysis and STEB (State Tax Equalization Board) purposes.

Valid Sales

• Code 00 (Valid Sale): Represents a typical arms-length transaction that has passed all validity tests.

Invalid Sales (General & STEB)

The following codes identify sales that are generally considered invalid for market analysis because they do not reflect fair market value:

• Code 01 (No Assessed Valuation): Used for properties like mobile homes or leaseholds that lack an assessed value.
• Code 02 (Family Transfer): Sales between family members or relatives, often involving nominal prices (e. g. , $1).
• Code 03 (Corporate Transfer): Acquisitions or divestments by large corporations, pension funds, or REITs involving multiple parcels.
• Code 04 (Government/Public Utility): Sales to or from schools, municipal buildings, or utility rights-of-way.
• Code 05 (Tax Exempt Agency): Sales involving government entities, school districts, HUD, hospitals, or religious organizations.
• Code 06 (Financial Institution): Sales involving banks, savings and loans, or insurance companies.
• Code 07 (Part Interest Sales): Conveyance of less than the full interest in a property.
• Code 08 (Forced Sale/Sheriff Sale): Transfers under adverse conditions such as foreclosures, tax claims, or sheriff's sales.
• Code 09 (Multiple-Parcel Sale): Transactions involving more than one parcel or deed at the time of sale.
• Code 10 (Estate Sale): Generally considered invalid unless the property was listed for sale and exposed to the market for a reasonable period.
• Code 11 (Land Contract): Long-term agreements that often do not represent current fair market value.
• Code 12 (Auctions): Absolute auctions are invalid unless well-advertised, well-attended, and subject to minimum bids or rights of refusal.
• Code 13 (Date Of Transfer): Invalid if the execution date differs from the recorded year.
• Code 14 (Time On Market): Invalid if the property was exposed to the market for too long, too short, or not at all.
• Code 15 (Corporate Relocation Company): Sales where a relocation company takes possession to liquidate the property.
• Code 16 (Sale Of Doubtful Title): Sales where title issues suggest the price is below market value.
• Code 17 (Lease Purchases/Leaseback): Sales involving leasebacks, where the price is unlikely to represent market value.
• Code 18 (Partial Assessment): Sales where the assessment is less than a full percentage of market value, including tax abatement programs (e. g. , LERTA) or undervalued vacant lots.
• Code 19 (Equipment/Personal Property): Sales including personal property (equipment, furniture, livestock) which invalidates the sale for real estate analysis.
• Code 20 (Special/Preferred Assessments): Sales involving special tax abatement programs.
• Code 21 (Duplicate Sales/Deed Of Correction): Sales occurring more than once in a calendar year or deeds correcting boundaries.
• Code 22 (Other): Miscellaneous reasons indicating a lack of arms-length selling price or proper description.
• Code 50 (Bldg/Improvement Added Since Sale): Parcels with improvements added after the last assessment or sale date.
• Code 51 (Building Deleted Since Sale): Parcels with buildings removed after the last assessment or sale date.
• Code 79 (Cost/Settlement Sale): Sales with odd amounts, often mortgage payoffs or builder sales with non-market land allocations.

Analysis Only / Research Required

These codes identify sales that are technically valid but require special handling or exclusion from certain models:

• Code 77 (Statistical): Valid sales excluded due to statistical variance from the current market model.
• Code 78 (Research Req): Valid sales manually excluded by an appraiser due to questions about the parcel, such as erroneous prices or mismatched property characteristics.