A comparable property sold for $450,000 and has a two-car garage. The subject property has a three-car garage. If a garage bay is valued at $8,000, what adjustment should be made to the comparable?
Correct Answer
A) Add $8,000
The comparable is inferior to the subject (2-car vs 3-car garage), so an upward adjustment of $8,000 is made to the comparable to account for the additional garage bay the subject has.
Why This Is the Correct Answer
Option A is correct because the comparable property has a 2-car garage while the subject has a 3-car garage, making the comparable inferior by one garage bay. Since the comparable is missing one garage bay compared to the subject, we must add $8,000 to the comparable's sale price to account for this deficiency. This upward adjustment compensates for the fact that the comparable sold for $450,000 despite having one less garage bay than our subject property. The adjustment brings the comparable's adjusted sale price in line with what it would have sold for if it had the same 3-car garage as the subject.
Why the Other Options Are Wrong
Option B: Subtract $8,000
Subtracting $8,000 would be incorrect because it assumes the comparable is superior to the subject, which is the opposite of the actual situation. This would further undervalue the comparable when it's already inferior to the subject.
Option C: Add $16,000
Adding $16,000 incorrectly calculates the adjustment as if there's a two-garage-bay difference, when there's only a one-bay difference between the 2-car and 3-car garages.
Option D: Subtract $16,000
Subtracting $16,000 makes two errors: using the wrong direction (subtraction instead of addition) and the wrong amount (two bays instead of one bay difference).
CIS Rule - Comparable Inferior, So add
Remember 'CIS' - when the Comparable is Inferior to the Subject, you add money. Think of it as 'paying more' to bring the inferior comparable up to the subject's level. Conversely, 'CSS' - when the Comparable is Superior to the Subject, you subtract money.
How to use: When you see an adjustment question, first identify which property (comparable or subject) has the better feature. If the comparable is missing something the subject has, use CIS (add). If the comparable has something extra the subject lacks, use CSS (subtract).
Exam Tip
Always read carefully to identify which property has more or better features, then remember that adjustments go TO the comparable. Draw a simple chart showing 'Comparable → Subject' with the adjustment direction if it helps visualize the process.
Common Mistakes to Avoid
- -Adjusting the subject property instead of the comparable
- -Using the wrong direction (adding when should subtract or vice versa)
- -Calculating the wrong amount of difference between properties
- -Forgetting that adjustments are always made TO the comparable property
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 arrive at an accurate value estimate. The key principle is that adjustments are always made TO the comparable property, not the subject. When the comparable is inferior to the subject (has fewer amenities or features), an upward adjustment is made to the comparable's sale price. When the comparable is superior to the subject, a downward adjustment is made to the comparable's sale price.
Background Knowledge
In the sales comparison approach, adjustments are always made to the comparable properties' sale prices, never to the subject property. The goal is to determine what each comparable would have sold for if it were identical to the subject property. Adjustments can be positive (adding value) when the comparable is inferior, or negative (subtracting value) when the comparable is superior.
Real-World Application
In practice, appraisers create detailed adjustment grids comparing multiple sales to the subject property. Each difference (garage bays, square footage, lot size, condition, etc.) requires a separate line item adjustment. The final adjusted sale prices of all comparables should cluster around a similar value range, which helps support the subject's estimated value.
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