A comparable listed at $389,900 and sold for $374,000. It is 200 square feet smaller than the subject, and paired sales support a +$12,000 adjustment for the difference, giving an adjusted price of $386,000. Its one remaining difference is location: it fronts a busy collector street, while the subject is on a quiet cul-de-sac. No market data measure this location effect. What does this comparable indicate about the subject's value?
Correct Answer
D) Above $386,000
The size difference has already been measured and applied, so the comparison continues from the adjusted price of $386,000, not the $374,000 sale price. The remaining location difference makes the comparable inferior, so the subject's value is indicated above $386,000. The $389,900 list price is not a sale and plays no part; stopping at $386,000 ignores the location rating, and working from $374,000 discards the supported size adjustment.
Why This Is the Correct Answer
Option D is correct because $374,000 + $12,000 = $386,000 accounts for size, and the comparable's busy-street location is still inferior to the subject's cul-de-sac. An inferior comparable indicates a value above its adjusted price, so the subject is indicated above $386,000.
Why the Other Options Are Wrong
Option A: Below $374,000
Option A, below $374,000, reverses the direction of the inferior location and drops the +$12,000 size adjustment. An inferior comparable points to a higher, not lower, value.
Option B: Between $374,000 and $386,000
Option B, between $374,000 and $386,000, treats the location difference as undoing part of the size adjustment. Both differences favor the subject, so they push the indication in the same upward direction.
Option C: About $386,000
Option C, about $386,000, stops at the adjusted price. That would be right only if no difference remained, but the comparable is still inferior in location.
Measure first, then rate
Adjust what the data can measure, then rate what is left against the adjusted price.
How to use: Use it when a grid has both dollar adjustments and superior or inferior ratings.
Exam Tip
Ignore list prices when a sale price is given. Then check which price the qualitative rating should be compared with.
Common Mistakes to Avoid
- -Rating qualitatively against the unadjusted sale price
- -Treating a list price as evidence of value
- -Ignoring a remaining qualitative difference after quantitative adjustments
Concept Deep Dive
Analysis
The question tests combining a quantitative adjustment with a qualitative rating. Differences the data can measure are adjusted first; the remaining differences are then rated against the subject starting from the adjusted price. The list price is a distraction because it is not a transaction.
Background Knowledge
Appraisers often use quantitative adjustments where data allow and qualitative analysis for the rest. The qualitative step compares the subject to the adjusted price, since the measured differences have already been removed.
Real-World Application
An appraiser measures a size adjustment from paired sales in a tract but finds no data on traffic noise. The report shows the adjusted price and states that the comparable's busy-street location is inferior, placing the subject above that adjusted figure.
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?
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Previous Question
In a college town, an appraiser is valuing a four-bedroom home; Comparable 3 is an otherwise similar three-bedroom home. Leases show four-bedroom homes rent for $3,050 per month furnished with the owner paying utilities, while otherwise similar three-bedroom homes rent for $2,400 per month unfurnished with tenants paying utilities. Local property managers report that furniture adds about $200 per month to rent and that owner-paid utilities average $250 per month. Sales of rented homes, all leased unfurnished with tenants paying utilities, show a monthly gross rent multiplier of 150. What adjustment for the fourth bedroom should be made to Comparable 3?
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A comparable sale price is adjusted upward by 5%, and the resulting adjusted price is then adjusted upward by 4%. What is the total percentage increase from the original sale price?