A comparable has a cash-equivalent price of $350,000. Its only adjustment is −$15,000, stated in current dollars. What is the adjusted price?
Correct Answer
B) $335,000
350000-15000=335000. Common errors: adding the adjustment instead of subtracting it gives $365,000; not applying the adjustment gives $350,000; reporting only the adjustment gives $15,000.
Why This Is the Correct Answer
Option B is correct because applying the −$15,000 adjustment gives $350,000 − $15,000 = $335,000. No other adjustments apply, so this is the adjusted price.
Why the Other Options Are Wrong
Option A: $15,000
Option A is wrong because $15,000 is only the size of the adjustment. The question asks for the adjusted price, which is $350,000 − $15,000 = $335,000.
Option C: $350,000
Option C is wrong because $350,000 is the price before the adjustment is applied. Applying the −$15,000 adjustment gives $335,000.
Option D: $365,000
Option D is wrong because $365,000 adds the adjustment instead of subtracting it: $350,000 + $15,000 = $365,000. The adjustment is negative, so the correct result is $335,000.
Keep the Sign
Carry the sign of each adjustment straight into the arithmetic; a minus means subtract.
How to use: Use this reminder each time you total a sales grid line.
Exam Tip
Check whether the answer choices include the adjustment amount by itself, and make sure you report the adjusted price when that is what is asked.
Common Mistakes to Avoid
- -Adding a negative adjustment
- -Reporting the adjustment instead of the adjusted price
- -Forgetting to apply the adjustment
Concept Deep Dive
Analysis
This question tests applying a stated signed adjustment to a comparable price. The adjustment is −$15,000, so it is subtracted from the $350,000 cash-equivalent price. The question asks for the adjusted price, not the adjustment.
Background Knowledge
On a sales grid, each adjustment carries a sign showing whether it raises or lowers the comparable's price. The adjusted price is the cash-equivalent price plus the sum of the signed adjustments. Adjustments are applied to the comparable, not the subject.
Real-World Application
A comparable sold for a cash-equivalent $350,000. The appraiser's supported adjustments net to −$15,000. The adjusted price shown on the grid is $335,000.
More Sales Comparison Questions
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The subject is a 10-year-old dwelling with improvement cost new of $640,000. A highly comparable 7-year-old dwelling recently sold for $580,000; at the sale date its site was worth $150,000 and its improvement cost new was $500,000. Market evidence shows depreciation accruing evenly with actual age. What is the depreciated value of the subject improvements?
Observed sale prices are $450,000, $475,000, $425,000, $500,000, $440,000. Calculate the range (maximum−minimum), to the nearest dollar.
Observed values are 100, 105, 110, 115, 120. Calculate the range (maximum−minimum).
For an arithmetic illustration only, depreciate a historical $2,000,000 construction cost on a zero-salvage straight-line 40-year schedule for 10 years. What unindexed scheduled amount remains? This is not a conclusion of current market value or current replacement cost.
For an arithmetic illustration, allocate historical construction cost $2,400,000 over 40 years on a zero-salvage equal annual schedule. After 8 years, what scheduled unindexed amount remains? This is not a current market-value conclusion.
For an arithmetic schedule only, allocate historical cost $2,500,000 over 40 years with zero residual. After 8 years, what unindexed scheduled amount remains? This is not an estimate of current market value.
The sale-price range is $45,000 and the maximum is $385,000. Find the minimum price.
A property is purchased for $1,500,000 with a loan of $1,200,000. Using the purchase price as the value, what is the loan-to-value ratio, as a percentage to one decimal?
Improvement cost new is $1,800,000. Separately supported improvement depreciation deductions of $200,000, $150,000, $100,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
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