Sales verification is the foundation of good values. Assessors spend a lot of time trying to ensure that point of sale property data is correct. Yet for many sales it is not so much a matter of correcting data, but rather simple exclusion from the analysis. The following is a survey of some of the many reasons we might investigate and possibly exclude sales from the analysis.
Change in Use: income properties are valued based on income. However, if a change in use is planned, the sale price may bear little relation to the potential income value of the improvements in their current state. Apartment block sales occurring prior to conversion to condos are a frequent problem with sale prices based on future business plans.
Real example: The empty warehouse above sold in early 2012 far in excess of its income value and was immediately under full renovation to convert it into 38 apartment units. The sale is significant evidence of potential value for conversion but is useless as a measure of income value or cap rate development.
Verdict: Do Not Include in Analysis 
Change in Zoning: if zoning changes after the sale, it may be time to switch the sale type to reflect the new zoning and likely use. Agriculturally zoned land in a developing residential subdivision that is ultimately re-zoned as multi-family or commercial should be identified as such on sale records. Sale prices will reflect the probable final use.
Verdict: Do Not Include in this Analysis 
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Include in a different analysis group.
Private Sales: private sales hide all manner of sins. Vendors may not be knowledgeable participants. Or vendors may be transferring to relatives. Or vendors may be financing for the buyers. Without personal contact we have no way to verify the condition of the improvements or the circumstances of the sale.
Real example: home sale with high asr and no listings. As a last resort you can check on neighbouring properties if no other information has come up. You may find the home was purchased by the next door neighbours. Given that it was not exposed on the open market and the sale price appears inappropriate the verdict is: goodbye sale.
Verdict: Do Not Include in Analysis 
Family Relationships: Normally there is no sale listing and the property sells lower than expected. This obvious scenario is often invisible since when property is transferred it may go from parents to married children or grandchildren. Internet searches will sometimes bring up obituaries which will clear up the family relationship.
Real example: home sale with high asr and no listings. An internet search of the purchaser names brings up old Gimli council minutes. A couple had applied for a permit for a park wedding in Gimli. At that time the bride’s maiden name is the same as the vendors.
Verdict: Do Not Include in Analysis 
Corporate Relationships: it’s a given to search companies when verifying sales but when you encounter difficulty, the internet can usually reveal relationships. Business websites are only too happy to reveal family and corporate histories or explain subsidiary relationships.
Verdict: Do Not Include in Analysis 
Extreme Low Sales: may herald future demolition. It is advisable to flag these properties to return to in future. If the property is restored or renovated it may still be of no use for analysis. If a property has structural problems, is a former grow-op or is not in usable condition, the sale should normally be excluded.
Verdict: Do Not Include in Analysis 
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Extreme High Sales: may still herald future demolition. Usually these are assumed to be properties that have upgraded which only need corrections to property data, but it can also be a sign of impending change of use. It may be a land sale or radical redevelopment.
Verdict: Do Not Include in Analysis 
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May belong in a different analysis group.
Demolitions: properties with improvements that are removed within a reasonable amount of time make questionable sales. They may be better off as those rare animals-land sales. Improvements that are demolished are hard to consider as the highest and best use of a site.
Verdict: Do Not Include in this Analysis. 
Include in a different analysis group.
Multi-Roll Sales: sale of multiple parcels of land can be combined if they are contiguous. They quickly become less useful when they are mixed property types.
Real example: a single family home is sold together with an adjoining vacant lot. If the lot is buildable, then they could be split and sold separately. It is impractical to split the sale price between them.
Verdict: Do Not Include in Analysis 
More Warning Signs:
Perfection– sale transfers for the exact assessed value. These sometimes turn out to be associated parties using the assessed value as a convenience.
No interior photos- if they don’t want you to see it, it may not be a pretty picture.
Habitat for Humanity and similar non-profit housing initiatives- these may have sweat equity provisions, low income qualifications, and special financing.
Government or Public sales- may be encouraging or assisting development to suit civic goals.
Expropriations– forced sales not on the public market. May or may not include a premium for business interruption.
