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
Corner versus interior location needs a supported market-effect analysis. Direction can vary with access, privacy, traffic or other attributes. Neither a universal premium nor automatic exclusion is justified solely by the label.
Why This Is the Correct Answer
Option D is correct because a corner versus mid-block difference may require an adjustment only where the market actually prices it. Adjustments to comparable sales should be market-derived, and the direction can vary with access, privacy, traffic or other features. The appraiser analyzes the market rather than relying on the label.
Why the Other Options Are Wrong
Option A: Requires excluding the comparable from the grid
Option A is wrong because a corner location does not by itself require excluding the comparable from the grid. If the market shows a price effect, the appraiser can adjust for it.
Option B: Has no effect on value in residential markets
Option B is wrong because it claims the corner difference has no effect on value in residential markets. In some markets buyers pay more or less for corner lots, so the appraiser must check market evidence rather than assume no effect.
Option C: Increases the corner lot’s value by a standard ten percent
Option C is wrong because there is no standard ten percent premium for corner lots. The effect, if any, can be positive or negative and must come from the market in which the properties compete.
Corner Can Cut Both Ways
A corner lot can add value or subtract it; only the local market tells you which.
How to use: Use this phrase whenever an answer choice assigns a fixed premium or fixed exclusion to a location feature.
Exam Tip
Be wary of answers that assign a set percentage or a blanket rule to a location feature; market-derived support is the expected standard.
Common Mistakes to Avoid
- -Applying a fixed percentage premium to corner lots
- -Excluding a comparable just because it is on a corner
- -Assuming corner location has no effect in residential markets
Concept Deep Dive
Analysis
This question tests whether a location difference like corner versus interior lot has a fixed effect. The answer depends on what the local market shows. A corner lot can be a plus or a minus depending on access, privacy and traffic, so the appraiser looks for market-derived evidence before adjusting.
Background Knowledge
Location adjustments are measured by how buyers in the subject's market react to differences. Corner lots may offer more light and access but less privacy and more traffic, so their effect varies. Adjustments should be market-derived rather than based on rules of thumb.
Real-World Application
In one suburb, paired sales show corner homes selling slightly below interior homes because of busy cross streets. The appraiser therefore adjusts a corner comparable upward toward the mid-block subject and explains the market evidence. In another neighborhood, the data show no measurable difference, so no adjustment is made.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
Which of these is listed by Fannie Mae as a sales or financing concession?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam