A comparable in a superior neighborhood sold for $295,000. Paired sales indicate the location difference is worth 6%. What is the adjusted price?
Correct Answer
D) $277,300
Why this is correct: the comparable is superior, so 6% comes off its price. Calculation: $295,000 × 0.94 = $277,300. Why the other choices are wrong: $312,700 adds 6% to a property already better located than the subject; $278,302 divides by 1.06 instead of multiplying by 0.94, which is a different operation and gives a different answer; $295,000 leaves a measured 6% difference unadjusted.
Why This Is the Correct Answer
Why this is correct: the comparable is superior, so 6% comes off its price. Calculation: $295,000 × 0.94 = $277,300. Why the other choices are wrong: $312,700 adds 6% to a property already better located than the subject; $278,302 divides by 1.06 instead of multiplying by 0.94, which is a different operation and gives a different answer; $295,000 leaves a measured 6% difference unadjusted.
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