A comparable sold for $310,000 and has a garage the subject lacks, worth $12,000. The comparable also lacks the subject's $5,000 deck. What is the adjusted price?
Correct Answer
D) $303,000, subtracting the garage and adding the deck
Why this is correct: Adjust the comparable to the subject. Subtract $12,000 for the superior garage, add $5,000 for the inferior deck: $310,000 - $12,000 + $5,000 = $303,000. Why the other choices are wrong: '$327,000, adding both the garage and the deck values' adds when it should subtract for the garage. '$317,000, adjusting both items upward' incorrectly adds both. '$310,000, since the differences offset' ignores that adjustments are made directionally. Exam tip: Use 'CBS': if the Comp is Better than the subject, Subtract; if worse, Add.
Why This Is the Correct Answer
Adjusting the comparable toward the subject means subtracting the $12,000 garage the subject lacks and adding the $5,000 deck the comparable lacks: $310,000 − $12,000 + $5,000 = $303,000.
Why the Other Options Are Wrong
Option A: $327,000, adding both the garage and the deck values
Adding both reverses the garage adjustment. A feature the comparable has and the subject lacks must be removed.
Option B: $317,000, adjusting both items upward
Adjusting both upward makes the same directional error on the garage.
Option C: $310,000, since the differences offset
The two items do not offset, since $12,000 and $5,000 are different amounts.
CIA — Comparable Inferior, Add
Comparable Inferior, Add; comparable superior, subtract. Always adjust the comparable, never the subject.
How to use: Take each feature one at a time and ask which property has it. The direction follows immediately.
Exam Tip
Two adjustments in opposite directions do not cancel unless the amounts match. Compute each and net them.
Common Mistakes to Avoid
- -Adjusting the subject rather than the comparable
- -Reversing the direction on a superior feature
- -Assuming offsetting items cancel
Concept Deep Dive
Analysis
Adjustments in the sales comparison approach are always made to the comparable, never to the subject, and the direction follows a single rule: make the comparable look like the subject. Where the comparable has something the subject lacks, that feature contributed to the comparable's price and must be removed — subtract. Where the comparable lacks something the subject has, the comparable would have sold for more had it been equipped like the subject — add. Applying that here: the comparable's garage is worth $12,000 and the subject has none, so subtract $12,000. The subject's deck is worth $5,000 and the comparable has none, so add $5,000. The adjusted price is $310,000 − $12,000 + $5,000 = $303,000. Each distractor is a directional error — adding both, subtracting both, or assuming the items cancel because there are two of them, which they do not since their values differ.
Background Knowledge
Sales comparison adjustments are applied to the comparable to make it resemble the subject. Features the comparable has and the subject lacks are subtracted; features the subject has and the comparable lacks are added.
Real-World Application
An appraiser subtracts $12,000 for the comparable's garage and adds $5,000 for the subject's deck, carrying $303,000 into the grid.
More Sales Comparison Questions
Excess land differs from surplus land in that excess land:
A paired sales analysis reveals that homes with stainless-steel appliances sell for $2,100 more than identical homes with standard appliances — but only when the homes are priced below $350,000. In the subject’s neighborhood, median sale price is $410,000. What is the appraiser’s obligation regarding the $2,100 appliance adjustment?
GLA differs by 210 sq ft between subject and comparable. Paired sales support $65 per sq ft of living area. The line adjustment is:
Paired sales are drawn from transactions six months apart in a stable market. The time adjustment needed is:
The most appropriate unit of comparison is determined by:
A comparable superior to the subject in every adjusted category should produce an indication that is:
Three sales support $520,000; the borrower's purchase contract is $505,000. May the appraisal conclude above the contract price?
A comparable sold for $300,000 with the seller carrying a loan 2 points below market, a benefit worth $8,000. What is its cash-equivalent price?
Why is a foreclosure sale generally a poor comparable in a stable market?
A comparable sold 8 months ago for $250,000 in a market appreciating 6% per year. What is the time-adjusted price?
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
Previous Question
In a sales comparison analysis, an appraiser applies a +$24,500 adjustment for a swimming pool to Comparable A, then later applies a −$18,200 adjustment for inferior HVAC to the same comparable. The appraiser reports a net adjustment of +$6,300. During peer review, it is noted that the pool adjustment was derived from a single sale pair involving a luxury estate, while the HVAC adjustment came from a cluster of mid-range transactions. What is the primary analytical deficiency?
Next Question
In a market saturated with bank-owned sales, an appraiser valuing a typical resale should treat REO transactions as: