A comparable property sold for $450,000 and has a two-car garage, while the subject property has a one-car garage. If a garage bay is worth $8,000, what adjustment should be made to the comparable?
Correct Answer
C) Subtract $8,000
Why this is correct: Adjustments are always made to the comparable's sale price to make it equivalent to the subject. Since the comparable is superior (has an extra garage bay worth $8,000), its price must be adjusted downward by that amount to reflect the subject's inferior feature. Why the other choices are wrong: Adding $16,000 would imply the subject is superior. No adjustment needed ignores the value difference between a one-car and two-car garage. Adding $8,000 to the comparable would make it even more superior, which is the opposite of the required adjustment. Exam tip: Use the phrase "C to S" (Comparable to Subject). If the comparable is better, subtract; if worse, add.
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 property (one-car garage). Since the comparable is better than the subject by one garage bay worth $8,000, we must subtract this amount from the comparable's sale price. This adjustment makes the comparable more similar to the subject property for comparison purposes. The logic is: if the comparable had only a one-car garage like the subject, it would have sold for $8,000 less.
Why the Other Options Are Wrong
SIS Rule
SIS = Superior comparable, Inferior comparable, Subject stays the same. When comparable is Superior to subject: Subtract. When comparable is Inferior to subject: Add. The Subject value never changes - only the comparable gets adjusted.
How to use: When you see a comparison question, first identify which property is superior for the feature in question. If the comparable is superior (better than the subject), use SIS and subtract. If the comparable is inferior (worse than the subject), add the adjustment amount.
Exam Tip
Always read carefully to identify which property has the superior feature, then remember that adjustments always go TO the comparable property. Write 'C→S' (comparable to subject) on your scratch paper to remind yourself of the adjustment direction.
Common Mistakes to Avoid
- -Adjusting in the wrong direction (adding when should subtract)
- -Applying adjustments to the subject property instead of the comparable
- -Using the total garage value instead of the difference value
Concept Deep Dive
Analysis
This question tests the fundamental principle 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 concept is that adjustments are always made TO the comparable, not to the subject. When a comparable property is superior to the subject property in any feature, the comparable's sale price must be adjusted downward to reflect what it would have sold for if it had the same inferior feature as the subject.
Background Knowledge
In the sales comparison approach, adjustments are made to comparable properties to account for differences with the subject property. The fundamental rule is: if the comparable is superior, subtract the difference; if the comparable is inferior, add the difference. All adjustments are made to the comparable's sale price, never to the subject property.
Real-World Application
In practice, appraisers regularly encounter properties with different garage configurations. A two-car garage typically adds significant value over a one-car garage due to increased storage and convenience. Appraisers must research local market data to determine the value difference per garage bay, then apply consistent adjustments across all comparables to ensure accurate valuation.
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