A comparable sold for $320,000 and has an adjusted price of $312,000. Its area is 2,080 square feet. What adjusted overall price per square foot results?
Correct Answer
B) 150.00
312000 / 2080 = 150.00 per square foot; use the specified adjusted-price numerator. Common errors: using the sale price instead of the adjusted price gives 153.85; misplacing the decimal in the area gives 1500.00; reporting the adjustment per square foot gives 3.85.
Why This Is the Correct Answer
Option B is correct because the question asks for the adjusted overall price per square foot, so the adjusted price is the numerator. $312,000 / 2,080 = $150.00 per square foot. Stating prices in common units makes comparables easier to compare.
Why the Other Options Are Wrong
Option A: 3.85
Option A, 3.85, is the adjustment per square foot: ($320,000 − $312,000) / 2,080 = $3.85. The question asks for the adjusted price per square foot, $312,000 / 2,080 = $150.00.
Option C: 153.85
Option C, 153.85, uses the sale price instead of the adjusted price: $320,000 / 2,080 = $153.85. The adjusted figure is $312,000 / 2,080 = $150.00.
Option D: 1500.00
Option D, 1500.00, misplaces the decimal in the area: $312,000 / 208 = $1,500.00. Using the correct area of 2,080 square feet gives $150.00.
Match the numerator
Adjusted price per square foot means adjusted price on top, area on the bottom.
How to use: Use this when a question gives both a sale price and an adjusted price.
Exam Tip
When two prices are given, reread which one the question asks you to divide; a quick estimate also catches decimal errors.
Common Mistakes to Avoid
- -Dividing the unadjusted sale price by the area
- -Misplacing a decimal in the area
- -Reporting the adjustment per square foot as the price
Concept Deep Dive
Analysis
This question tests computing an adjusted unit price from the correct numerator. The adjusted price, not the original sale price, is divided by the area. $312,000 / 2,080 = $150.00 per square foot.
Background Knowledge
Units of comparison restate each sale price in common terms, such as price per square foot of living area. The sales comparison grid can show a unit price for the sale price, and an adjusted unit price can be computed from the adjusted sale price. Using the right numerator matters because the two figures answer different questions.
Real-World Application
An appraiser reconciles three comparables by comparing their adjusted prices per square foot. One comparable sold for $320,000 and adjusted to $312,000 with 2,080 square feet. The appraiser reports $150.00 per square foot for its adjusted indication.
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