Which type of transactions would disqualify a sale from consideration in an appraisal?

Sales between family members or affiliated parties disqualify a transaction from consideration in an appraisal primarily because they often occur at non-market rates. These transactions can involve motivations different from those of a typical buyer and seller in an open market, such as emotional ties, gifts, or other considerations that do not reflect true market value. As a result, appraisers seek to avoid these types of sales because they may skew the market data and do not provide a reliable indication of property value based on current market conditions.

In contrast, sales on the open market typically represent fair market transactions where property is bought and sold based on prevailing conditions and buyer competition. New construction projects are often evaluated based on their cost and the market demand for new properties. Sales of vacant land may also serve as valid comparisons if they occur under similar market conditions, as their valuations can be cogently analyzed in terms of location and future potential. Overall, the unique dynamics of transactions between family members or affiliated parties render them unreliable indicators of market value, making them unsuitable for inclusion in appraisal analysis.