A comparable’s cash-equivalent price is $295,000. It requires current-dollar adjustments of +$6,000, −$8,000, +$3,000, and −$4,000, and no others. What is the adjusted price?
Correct Answer
A) $292,000
295000+6000-8000+3000-4000=292000. Common errors: adding the −$8,000 instead of subtracting it gives $308,000; adding the −$4,000 instead of subtracting it gives $300,000; reversing every sign gives $298,000.
Why This Is the Correct Answer
Option A is correct because $295,000 + $6,000 − $8,000 + $3,000 − $4,000 = $292,000. The positive adjustments total +$9,000 and the negative adjustments total −$12,000, for a net of −$3,000. Each adjustment is applied to the comparable with its stated sign.
Why the Other Options Are Wrong
Option B: $298,000
Option B, $298,000, comes from reversing all four signs: $295,000 − $6,000 + $8,000 − $3,000 + $4,000 = $298,000. Using the signs as given produces $292,000.
Option C: $300,000
Option C, $300,000, comes from adding the −$4,000 instead of subtracting it: $295,000 + $6,000 − $8,000 + $3,000 + $4,000 = $300,000. Subtracting the $4,000 gives $292,000.
Option D: $308,000
Option D, $308,000, comes from adding the −$8,000 instead of subtracting it: $295,000 + $6,000 + $8,000 + $3,000 − $4,000 = $308,000. Subtracting the $8,000 gives $292,000.
Keep each sign
Total the pluses, total the minuses, and net them before touching the price.
How to use: Use this for any grid with several signed dollar adjustments.
Exam Tip
Group positive and negative adjustments separately, net them, and then apply the net to the price.
Common Mistakes to Avoid
- -Adding a negative adjustment instead of subtracting it
- -Reversing the signs of the adjustments
- -Adjusting the subject instead of the comparable
Concept Deep Dive
Analysis
This question tests applying signed dollar adjustments to a comparable's price. Add the positive adjustments and subtract the negative ones. The four adjustments net to −$3,000.
Background Knowledge
In the sales grid, adjustments are made to the comparable to show what it would have sold for if it were like the subject. A positive adjustment means the comparable is inferior to the subject; a negative one means it is superior. The adjusted price equals the sale price plus the net of the signed adjustments.
Real-World Application
A comparable sold for $295,000 and needs adjustments for a smaller lot, a superior kitchen, one fewer bath and a newer roof. The appraiser enters each with its sign (+$6,000, −$8,000, +$3,000, −$4,000) and reaches an adjusted price of $292,000.
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