A comparable sold for $286,000. The subject has 150 more square feet of GLA and 2,000 fewer square feet of lot. Supported marginal rates for these differences are $70 per square foot of GLA and $5 per square foot of lot. What adjusted price results?
Correct Answer
B) $286,500
286000 + 150 × 70 − 2000 × 5 = 286500. Common errors: adding the lot adjustment instead of subtracting it gives $306,500; subtracting the GLA adjustment instead of adding it gives $265,500; leaving out the lot adjustment gives $296,500.
Why This Is the Correct Answer
Option B is correct because the subject has 150 more square feet of GLA, so the comparable is inferior and gets +150 × $70 = +$10,500. The subject has 2,000 fewer square feet of lot, so the comparable is superior and gets −2,000 × $5 = −$10,000. $286,000 + $10,500 − $10,000 = $286,500.
Why the Other Options Are Wrong
Option A: $265,500
Option A, $265,500, comes from subtracting the GLA adjustment as well: $286,000 − $10,500 − $10,000. The comparable has less GLA than the subject, so the $10,500 is added, giving $286,500.
Option C: $296,500
Option C, $296,500, leaves out the lot adjustment: $286,000 + $10,500. The comparable's larger lot requires −$10,000, giving $286,500.
Option D: $306,500
Option D, $306,500, adds the lot adjustment instead of subtracting it: $286,000 + $10,500 + $10,000. The comparable has more lot than the subject, so it is superior on that line and the $10,000 is subtracted, giving $286,500.
Who has more?
For each feature, ask who has more: if the subject does, add; if the comparable does, subtract.
How to use: Use this on every line of a grid problem where features point in different directions.
Exam Tip
When the stem describes the subject's differences, translate each into the comparable's position before choosing a sign.
Common Mistakes to Avoid
- -Giving all adjustments the same sign
- -Reading the subject's difference as the comparable's
- -Dropping one of two offsetting adjustments
Concept Deep Dive
Analysis
This question tests adjustments that run in opposite directions. The comparable has less GLA than the subject (inferior, add) but more lot than the subject (superior, subtract). The result is $286,000 + 150 × $70 − 2,000 × $5 = $286,500.
Background Knowledge
A comparable can be inferior on one characteristic and superior on another, so its adjustments can carry opposite signs. Each adjustment is based on the comparable's difference from the subject, using a supported rate for that characteristic. Reading which property has more of each feature is the key step.
Real-World Application
A comparable is a slightly smaller house on a larger lot than the subject. Market evidence supports $70 per square foot for GLA and $5 per square foot of lot. The grid shows +$10,500 for GLA and −$10,000 for site, leaving the comparable close to its sale price.
More Sales Comparison Questions
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Which two depreciation categories may each be classified as curable or incurable by comparing the cost to remedy a deficiency with the value gained?
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