A comparable is a corner lot while the subject sits mid-block. This difference:
Correct Answer
D) May require adjustment where the market prices it
Why this is correct: Market reaction to a corner lot versus a mid-block lot varies by location and property type. An adjustment is required only if market data (e.g., paired sales analysis) indicates a consistent price difference that buyers and sellers recognize. Why the other choices are wrong: Excluding the comparable entirely is unnecessary if an adjustment can be supported. Stating it never affects value is false; it often does. Stating it always increases value is false; corner lots can be less desirable due to noise or lack of privacy. Exam tip: The need for an adjustment is always market-derived. Never assume a premium or discount without market evidence.
Why This Is the Correct Answer
The correct answer conditions the adjustment on whether the market prices the difference, which is the general rule for every element of comparison. If paired sales in the neighborhood show corner lots consistently selling higher or lower, that measured difference becomes the adjustment. If no consistent difference appears, the supportable treatment is no adjustment, and the report can say so. The conditional wording is what makes option D correct where the absolutes fail.
Why the Other Options Are Wrong
Option A: Requires excluding the comparable entirely
A corner location is an ordinary, adjustable difference, not a disqualifying defect. Excluding the comparable would discard market evidence over a characteristic the grid is designed to handle. Exclusion is appropriate for sales that are not arm's length or not representative of the market, which is not the case here.
Option B: Never affects value in residential markets
Saying corner location never affects value in residential markets is contradicted by observable market behavior in many neighborhoods, where corner lots sell at measurable premiums or discounts depending on traffic, lot size, and privacy norms. Absolute negatives require proof that this option cannot supply. It attracts candidates who have seen markets where the effect is small and generalize from them.
Option C: Always increases the corner property's value in every market
Claiming corner lots always increase value ignores the real disadvantages: two-sided traffic, reduced privacy, dual setback requirements that shrink the building envelope, and more exterior maintenance. What is a plus for a corner gas station is often a minus for a family home. Assuming a universal premium is how unsupported positive adjustments end up in reports.
Corner Cuts Both Ways
A corner cuts both ways: more exposure and access on one side of the ledger, more traffic and less privacy on the other. Which side wins is a local question, so the answer to a corner-lot question is always 'measure it,' never 'assume it.'
How to use: For any physical or locational feature question, scan the options for absolutes. 'Requires excluding,' 'never affects,' and 'always increases' are all disqualified by their own wording, leaving the conditional, market-tested option as the answer.
Exam Tip
When three options contain absolutes and one is conditional, the conditional one is almost always correct on appraisal methodology questions.
Common Mistakes to Avoid
- -Applying an automatic corner-lot premium carried over from commercial practice into a residential assignment
- -Excluding an otherwise strong comparable over a difference the grid could handle
- -Making an adjustment without paired sales support and being unable to defend it in review
Concept Deep Dive
Analysis
This question tests the conditional nature of adjustments using a feature whose market effect genuinely varies. A corner lot brings more street frontage, better visibility, and often a second access point, which is a clear advantage for commercial and some residential buyers. It also brings more traffic and noise on two sides, less backyard privacy, larger setback requirements that reduce buildable area, and more sidewalk to maintain. In some residential markets corner lots sell at a premium, in others at a discount, and in many at no measurable difference. Because the direction is not fixed by theory, the appraiser must test it against local paired sales and adjust only if the market shows a consistent, measurable effect.
Background Knowledge
You need to know that site and location characteristics are elements of comparison whose adjustments must be market-derived, and that the same feature can be positive in one property type or market and negative in another. You should also be familiar with paired sales analysis as the standard technique for testing whether a feature carries a measurable price effect.
Real-World Application
An appraiser in a suburban tract pulls six corner-lot sales and six mid-block sales of the same floor plan and finds no statistically meaningful price difference. The report uses the corner-lot comparable with no site adjustment and includes a sentence explaining that the paired analysis showed no market reaction, which preempts the reviewer's question.
More Sales Comparison Questions
Excess land differs from surplus land in that excess land:
A paired sales analysis reveals that homes with stainless-steel appliances sell for $2,100 more than identical homes with standard appliances — but only when the homes are priced below $350,000. In the subject’s neighborhood, median sale price is $410,000. What is the appraiser’s obligation regarding the $2,100 appliance adjustment?
GLA differs by 210 sq ft between subject and comparable. Paired sales support $65 per sq ft of living area. The line adjustment is:
Paired sales are drawn from transactions six months apart in a stable market. The time adjustment needed is:
The most appropriate unit of comparison is determined by:
A comparable superior to the subject in every adjusted category should produce an indication that is:
Three sales support $520,000; the borrower's purchase contract is $505,000. May the appraisal conclude above the contract price?
A comparable sold for $300,000 with the seller carrying a loan 2 points below market, a benefit worth $8,000. What is its cash-equivalent price?
Why is a foreclosure sale generally a poor comparable in a stable market?
A comparable sold 8 months ago for $250,000 in a market appreciating 6% per year. What is the time-adjusted price?
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Excess land differs from surplus land in that excess land:
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An appraiser adjusts a comparable for a 200-square-foot garage addition using a $45/sf adjustment rate. The subject has no garage. The appraiser applies the adjustment as −$9,000 to the comparable’s sale price. Later, the appraiser discovers that the garage contributed only $32/sf in the local market based on paired sales analysis. What is the correct treatment of this error under USPAP Standards Rule 1-4?