A comparable is superior in condition. Market evidence—not the repair invoice alone—isolates a $7,500 condition penalty for the subject’s deficiencies. What signed condition adjustment applies to the comparable toward the subject?
Correct Answer
A) −$7,500
Comparable superior by 7500; signed comparable-to-subject adjustment=−7500. Common errors: adjusting upward instead of downward gives $7,500; concluding that no adjustment is needed gives $0; deducting the contribution twice gives −$15,000.
Why This Is the Correct Answer
Option A is correct because the comparable is superior in condition by $7,500, so its price must be reduced to reflect the subject's inferior condition. The signed comparable-to-subject adjustment is −$7,500. The amount comes from market evidence, not the repair invoice alone.
Why the Other Options Are Wrong
Option B: −$15,000
Option B is wrong because −$15,000 comes from deducting the condition penalty twice: −2 × $7,500 = −$15,000. The market isolates a single $7,500 difference, so the correct adjustment is −$7,500.
Option C: $0
Option C is wrong because $0 assumes no adjustment is needed. Market evidence isolates a $7,500 condition difference, so the superior comparable must be adjusted by −$7,500.
Option D: $7,500
Option D is wrong because $7,500 adjusts upward instead of downward. A comparable that is superior to the subject is adjusted down, so the correct sign is negative: −$7,500.
Better Comp, Bring Down
If the comp is better than the subject, bring the comp's price down; if it is worse, bring it up.
How to use: Use this phrase to set the sign of any single-feature adjustment.
Exam Tip
Check which property is superior before picking a sign, and watch for doubled amounts that are designed to catch double counting.
Common Mistakes to Avoid
- -Using the repair invoice as the adjustment without market support
- -Adding the amount to a superior comparable
- -Counting the same condition difference twice
Concept Deep Dive
Analysis
This question tests the sign of a condition adjustment when the comparable is better than the subject. Adjustments go to the comparable, so a superior comparable is adjusted downward. The market-derived penalty of $7,500 is applied once, with a negative sign.
Background Knowledge
Condition adjustments reflect how the market reacts to differences in upkeep and deferred maintenance. The cost to repair is not automatically the market reaction, so appraisers look for market evidence such as paired sales. The adjustment is applied to the comparable so it reflects what it would have sold for in the subject's condition.
Real-World Application
A subject house needs a new roof and interior paint, while a nearby comparable was recently updated. Paired sales show buyers paid about $7,500 more for similar updated homes. The appraiser enters −$7,500 on the comparable's condition line.
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