A subject property has a 3-car attached garage. The appraiser locates two valid paired sales: Sale 1 (with 3-car garage) sold for $512,000; Sale 2 (with 2-car garage) sold for $497,600. Both properties are otherwise identical — same age, quality, GLA, lot size, and neighborhood — and sold 5 days apart in a balanced market. The appraiser also confirms via public records and listing photos that no other functional or physical differences exist. What is the indicated contributory value of the *third* garage stall?
Correct Answer
B) $14,400
The price difference is $512,000 − $497,600 = $14,400. Because the only difference is the third stall (both have attached garages; one has 2 stalls, the other 3), the paired data indicates the contributory value of the incremental stall is $14,400. This reflects the marginal contribution — not the average per stall — and aligns with USPAP Standards Rule 1-4(b) requiring adjustments based on market evidence of what buyers pay for specific, isolated differences.
Why This Is the Correct Answer
The arithmetic gives $14,400, and because the pair is verified clean, the whole gap belongs to the single differing feature. The figure is the marginal contribution of moving from two stalls to three, which is what the question asks for. It is a market-derived measure, so it reflects buyer behavior rather than construction cost, and it is the correct form of support for a garage adjustment in the grid. In practice the appraiser would seek additional pairs to confirm that $14,400 sits within a consistent range rather than resting the adjustment on one comparison.
Why the Other Options Are Wrong
Option A: $7,200
$7,200 is half the observed gap, which would follow only if the difference were somehow shared between two features or if the candidate divided by the number of stalls in some way. Nothing in the facts supports halving a gap that has already been isolated to one difference. Splitting a clean paired result is a habit borrowed from contaminated pairs.
Option C: $21,600
$21,600 is one and a half times the gap and corresponds to no operation on the given figures. It may attract candidates who reason that three stalls at $7,200 each should total $21,600, which confuses the total value of all stalls with the marginal contribution of the third. The pair measures only the step from two stalls to three.
Option D: $28,800
$28,800 is double the observed difference, the figure produced by treating the gap as applying to two stalls rather than one. Both properties have attached garages and the difference is a single stall, so there is nothing to double. It also fails a simple check, since $28,800 exceeds the entire spread between the two sale prices.
Clean Pair, Whole Gap
If the pair is genuinely clean, the entire price difference belongs to the single differing feature. No halving, no dividing by the number of units, no averaging. Verify the isolation, then take the gap whole.
How to use: First confirm the stem establishes that only one difference exists and that timing is neutral. Then subtract the two prices and select that figure without further manipulation.
Exam Tip
Read whether the question asks for the marginal contribution of an added unit or the total contribution of a feature. The pair measures the increment, and exams offer the total as a distractor.
Common Mistakes to Avoid
- -Dividing a clean paired gap among features or units
- -Confusing the marginal contribution of an added unit with the total value of the feature
- -Failing to time-adjust pairs that sold months apart
Concept Deep Dive
Analysis
Paired sales analysis isolates the market's price for a single difference by comparing two otherwise identical transactions. The stem takes unusual care to establish that isolation: same age, quality, gross living area, lot size, and neighborhood, five days apart in a balanced market so no time adjustment is needed, and verification through public records and listing photographs that nothing else differs. With the pair genuinely clean, the entire price gap is attributable to the one difference. That gap is $512,000 minus $497,600, or $14,400, and the one difference is the third garage stall. The word contributory in the question matters because it asks what the market paid for that stall, not what the stall cost to build, and the two figures are frequently different. It is also a marginal measure rather than an average: the third stall's contribution need not equal the first or second stall's, since diminishing returns typically apply as a feature is added beyond what the market expects.
Background Knowledge
You need the mechanics and assumptions of paired sales analysis, especially the requirement that pairs differ in one significant characteristic and be adjusted for time before comparison. You should also understand contributory value as distinct from cost, and the principle of diminishing returns as it applies to incremental features.
Real-World Application
An appraiser supporting a garage adjustment finds two nearly identical homes closing within a week of one another, one with three stalls and one with two. She confirms via listing photographs that finishes and lot conditions match, uses the $14,400 gap, and cross-checks it against two other pairs before adopting the adjustment.
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:
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A comparable sold 8 months ago for $250,000 in a market appreciating 6% per year. What is the time-adjusted price?
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