A comparable cash price is $296,000 and the sum of absolute dollar adjustment magnitudes is $44,400. What gross adjustment percentage of original price results? This ratio alone does not prescribe comparable acceptability or weighting.
Correct Answer
B) 15.0%
44400÷296000×100=15. Common errors: reporting the complement instead of the gross percentage gives 85.0%; inverting the ratio (price ÷ adjustments) gives 666.7%; misplacing the decimal (×10 instead of ×100) gives 1.5%.
Why This Is the Correct Answer
Option B is correct because gross adjustment percentage equals total absolute adjustments divided by the original price: $44,400 ÷ $296,000 × 100 = 15.0%. This is the figure reported on the sales comparison grid as Gross Adj. %.
Why the Other Options Are Wrong
Option A: 1.5%
Option A, 1.5%, comes from misplacing the decimal by multiplying by 10 instead of 100 ($44,400 ÷ $296,000 × 10). The correct calculation is $44,400 ÷ $296,000 × 100 = 15.0%.
Option C: 85.0%
Option C, 85.0%, is the complement: ($296,000 − $44,400) ÷ $296,000 × 100. That shows the share of price not adjusted, not the gross adjustment percentage, which is $44,400 ÷ $296,000 × 100 = 15.0%.
Option D: 666.7%
Option D, 666.7%, inverts the ratio by dividing price by adjustments ($296,000 ÷ $44,400 × 100). Gross adjustment percentage puts the adjustments in the numerator: $44,400 ÷ $296,000 × 100 = 15.0%.
Gross ignores signs
Gross adjustment adds every adjustment as a positive number; net adjustment lets pluses and minuses cancel. Both are divided by the comparable's sale price.
How to use: When given a list of mixed adjustments, use absolute values for gross and signed values for net.
Exam Tip
Put the adjustment total over the sale price, then multiply by 100. If your answer exceeds 100%, you likely inverted the ratio; if it is ten times too small for the dollar figures given, check for a decimal slip.
Common Mistakes to Avoid
- -Inverting the ratio (price divided by adjustments)
- -Reporting the complement of the percentage
- -Letting positive and negative adjustments offset when computing gross
Concept Deep Dive
Analysis
This question tests the gross adjustment percentage calculation. Gross adjustment sums the absolute values of all adjustments, regardless of sign, and divides by the comparable's original sale price. The ratio is a measure of how much adjusting a comparable needed; it does not by itself decide whether the comparable is acceptable.
Background Knowledge
The sales comparison grid reports both net and gross adjustment percentages for each comparable. Net adjustment lets positive and negative adjustments offset, while gross adjustment adds their absolute values. A higher gross percentage indicates greater dissimilarity between the comparable and the subject.
Real-World Application
On a residential appraisal, a comparable has several plus and minus adjustments for size, condition and garage. The appraiser totals their absolute amounts, divides by the sale price to report the gross percentage, and considers that figure when deciding how much weight the comparable deserves.
More Sales Comparison Questions
Which stated cause of supported value loss is external?
Improvement cost new is $450,000. Separately supported improvement depreciation deductions of $45,000, $25,000, $15,000 are expressly nonoverlapping and not already excluded from cost new. Add supported site value of $125,000, already reflecting any site losses. What total indicated value results?
Which two depreciation categories may each be classified as curable or incurable by comparing the cost to remedy a deficiency with the value gained?
Improvement cost new is $800,000. Separately supported improvement depreciation deductions of $120,000, $80,000, $40,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
The principle of anticipation in real estate valuation states that:
Which highest-and-best-use criterion addresses whether a proposed use is allowed by zoning and applicable legal restrictions?
Three comparables produce adjusted indications of $312,000, $309,000 and $315,000, requiring gross adjustments of 9%, 14% and 22% respectively. Verification also establishes that the first sale is the closest competitive substitute and its adjustments are better supported than the other two. Which indication deserves the most weight on those facts?
When reconciling value indications from the three approaches to value, an appraiser should:
A property sold at a cash-equivalent price of $1,062,500. Its stabilized annual NOI is $85,000. What is the indicated overall rate?
In reconciliation, an appraiser should:
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Related Tools
Previous Question
Which plan best organizes analysis before comparing physical differences?
Next Question
Comparable cash price is $290,000 with 2,000 sf GLA. Subject GLA is 2,100 sf and a supported marginal adjustment rate $75/sf applies only to their difference. No other adjustments apply. What adjusted comparable price results?