The grid for a comparable with a cash-equivalent price of $517,500 shows current-dollar adjustments of +$9,500, −$14,000, +$6,250, and −$2,750. No other adjustments apply. What is the adjusted price?
Correct Answer
B) $516,500
517500+9500-14000+6250-2750=516500. Common errors: adding the −$14,000 instead of subtracting it gives $544,500; adding the −$2,750 instead of subtracting it gives $522,000; subtracting the +$9,500 instead of adding it gives $497,500.
Why This Is the Correct Answer
Option B is correct because $517,500 + $9,500 − $14,000 + $6,250 − $2,750 = $516,500. The net adjustment is −$1,000, so the adjusted price is slightly below the cash-equivalent price.
Why the Other Options Are Wrong
Option A: $497,500
Option A, $497,500, subtracts the +$9,500 instead of adding it: $517,500 − $9,500 − $14,000 + $6,250 − $2,750. With the correct sign the result is $516,500.
Option C: $522,000
Option C, $522,000, adds the −$2,750 instead of subtracting it: $517,500 + $9,500 − $14,000 + $6,250 + $2,750. With the correct sign the result is $516,500.
Option D: $544,500
Option D, $544,500, adds the −$14,000 instead of subtracting it: $517,500 + $9,500 + $14,000 + $6,250 − $2,750. With the correct sign the result is $516,500.
Net first, then add
Total the signed adjustments into one net figure, then add that net to the starting price.
How to use: Use this to reduce sign errors when a grid has many adjustments.
Exam Tip
Compute the net adjustment separately (here −$1,000) as a check; the answer must equal the starting price plus that net.
Common Mistakes to Avoid
- -Flipping the sign of one adjustment
- -Adding all adjustments as positive numbers
- -Starting from the recorded price instead of the cash-equivalent price
Concept Deep Dive
Analysis
This question tests careful application of several signed adjustments to a cash-equivalent price. Each adjustment keeps its given sign, and all are added together. Tracking each sign is the key skill.
Background Knowledge
Adjustments are made to the comparable's price after it has been converted to cash equivalence where needed. Each line on the grid carries a plus or minus sign showing whether the comparable is inferior or superior. The adjusted price is the starting price plus the net of all signed adjustments.
Real-World Application
An appraiser enters four adjustments for a comparable on the grid. Totaling them to a net of −$1,000 before applying it helps confirm the adjusted price of $516,500 is free of sign errors.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
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A comparable sold for $310,000. Relative to the subject, it has an extra garage contribution of $12,000 and lacks a deck worth $5,000. These are supported current-dollar differences. What adjusted price results?
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