A comparable has 800 square feet of finished basement, which this market supports at $32 per square foot. The subject has none. Gross living area above grade is supported at $68 per square foot. What adjustment applies?
Correct Answer
D) -$25,600
Why this is correct: finished basement area carries its own rate, well below above-grade living area, and the comparable is superior. Calculation: 800 × $32 = -$25,600. Why the other choices are wrong: +$25,600 credits the comparable for space the subject lacks; -$54,400 applies the above-grade rate of $68 to below-grade space, which is the error the two separate rates exist to prevent; -$800 adjusts by the square footage rather than by its value.
Why This Is the Correct Answer
Why this is correct: finished basement area carries its own rate, well below above-grade living area, and the comparable is superior. Calculation: 800 × $32 = -$25,600. Why the other choices are wrong: +$25,600 credits the comparable for space the subject lacks; -$54,400 applies the above-grade rate of $68 to below-grade space, which is the error the two separate rates exist to prevent; -$800 adjusts by the square footage rather than by its value.
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