A comparable property sold for $285,000 and has a two-car garage while the subject has a one-car garage. If a garage bay is worth $8,000, what adjustment should be made to the comparable?
Correct Answer
B) -$8,000
Since the comparable is superior to the subject (two-car vs. one-car garage), a negative adjustment of $8,000 must be made to the comparable's sale price to make it more similar to the subject property.
Why This Is the Correct Answer
Option B is correct because the comparable property has a superior feature (two-car garage) compared to the subject (one-car garage). Since the comparable is better by one garage bay worth $8,000, we must subtract $8,000 from the comparable's sale price. This negative adjustment accounts for the fact that the comparable would have sold for less if it only had a one-car garage like the subject property.
Why the Other Options Are Wrong
Option A: +$8,000
Option A is incorrect because it adds $8,000 to the comparable, which would be appropriate if the subject were superior to the comparable. Since the comparable has the better garage (two-car vs. one-car), adding money would incorrectly increase the comparable's adjusted value.
Option C: +$16,000
Option C is incorrect because it adds $16,000, which represents the value of two garage bays rather than the one-bay difference between the properties. The adjustment should only reflect the actual difference between comparable and subject, not the total value of the comparable's feature.
Option D: -$16,000
Option D is incorrect because while the direction is right (negative adjustment), the amount is wrong. The $16,000 represents two garage bays, but we only need to adjust for the one-bay difference between the two-car garage (comparable) and one-car garage (subject).
CBS Rule - Comparable Better Subtract
CBS: When the Comparable is Better, Subtract. CWA: When the Comparable is Worse, Add. Think of CBS television network - when you see the comparable is better, you subtract from its value.
How to use: When you see an adjustment question, first identify which property has the better feature. If it's the comparable (CBS), subtract the value. If the subject is better (CWA), add to the comparable. Always adjust TO the comparable, never to the subject.
Exam Tip
Always read carefully to identify which property has the superior feature, then remember that adjustments are made TO the comparable's sale price. Draw a simple chart: Comparable → Subject, and use + or - arrows to show the adjustment direction.
Common Mistakes to Avoid
- -Adjusting in the wrong direction (adding when should subtract)
- -Using the total value of the feature instead of the difference between properties
- -Making adjustments to the subject instead of the comparable
Concept Deep Dive
Analysis
This question tests the fundamental concept of sales comparison adjustments in real estate appraisal. When using comparable sales, appraisers must adjust for differences between the comparable property and the subject property to estimate the subject's value. The key principle is that adjustments are always made TO the comparable property's sale price, not to the subject. If the comparable is superior to the subject in any feature, a negative adjustment is made to reduce the comparable's value to match the subject's characteristics.
Background Knowledge
Sales comparison adjustments follow the principle that all adjustments are made to the comparable property's sale price to make it more similar to the subject property. When a comparable has a superior feature, a negative adjustment is made; when the comparable has an inferior feature, a positive adjustment is made.
Real-World Application
In practice, appraisers create detailed adjustment grids comparing multiple sales to the subject property. Each difference (bedrooms, bathrooms, square footage, garage spaces, etc.) requires an adjustment to make the comparable sales more similar to the subject, ultimately arriving at an indicated value range for the subject property.
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