A comparable sold for $350,000 with two garage bays; the subject has one. Supported market evidence values this incremental second bay at $8,000. What signed adjustment applies for the bay difference?
Correct Answer
A) −$8,000
(1 − 2) × 8000 = −8000. Common errors: adjusting upward instead of downward gives $8,000; concluding that no adjustment is needed gives $0; deducting the contribution twice gives −$16,000.
Why This Is the Correct Answer
Option A is correct because the comparable has one more bay than the subject: (1 − 2) × $8,000 = −$8,000. The comparable is superior on this feature, so its price is reduced by the supported $8,000 contribution of the incremental bay.
Why the Other Options Are Wrong
Option B: −$16,000
Option B, −$16,000, deducts the contribution twice (2 × $8,000 = $16,000), as if both bays were removed. Only the one-bay difference is adjusted: (1 − 2) × $8,000 = −$8,000.
Option C: $0
Option C, $0, concludes no adjustment is needed, even though the market supports $8,000 for the second bay. The bay difference requires (1 − 2) × $8,000 = −$8,000.
Option D: $8,000
Option D, $8,000, adjusts upward instead of downward. The comparable has the extra bay, so it is superior and is adjusted by −$8,000.
Subject minus comp, times rate
Compute (subject units − comparable units) × unit value; the sign comes out right on its own.
How to use: Use this for bays, bathrooms, bedrooms or any countable feature adjustment.
Exam Tip
Adjust only for the difference in units, not the full count of the feature in the comparable.
Common Mistakes to Avoid
- -Adjusting for the full number of bays instead of the difference
- -Adding the adjustment to a superior comparable
- -Ignoring a supported incremental feature
Concept Deep Dive
Analysis
This question tests an incremental feature adjustment. The comparable has two garage bays and the subject has one, so the comparable has one extra bay. The supported contribution of that one bay is subtracted from the comparable.
Background Knowledge
Feature adjustments are based on the difference between the comparable and the subject multiplied by the market-supported contribution per unit. The sign follows from whether the comparable is better or worse than the subject on that feature.
Real-World Application
A comparable with a two-car garage sold for $350,000; the subject has a one-car garage. Market data support $8,000 for the second bay, so the appraiser enters −$8,000 on the grid.
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