Adjusted prices are $257,000, $256,200, $258,000, $259,000 and $262,200, with gross adjustments of 3.7%, 7.5%, 0.0%, 6.0% and 8.8%. Which sale is likely the best indicator?
Correct Answer
C) The $258,000 sale
The sale needing the least absolute gross adjustment, as a percentage of price, is often the most comparable and should get the most weight. The $258,000 sale needed no adjustments (0.0%).
Why This Is the Correct Answer
Option C is correct because the $258,000 sale needed 0.0% gross adjustment, the lowest of the five (3.7%, 7.5%, 0.0%, 6.0% and 8.8%). A sale requiring no adjustments is often the most comparable and the one that should receive the most weight.
Why the Other Options Are Wrong
Option A: The $262,200 sale
Option A, the $262,200 sale, required the largest gross adjustment at 8.8%. A heavier gross adjustment generally signals less similarity to the subject, so this sale is a poorer candidate for the best indicator than the $258,000 sale that needed no adjustments.
Option B: The $256,200 sale
Option B, the $256,200 sale, needed 7.5% gross adjustment, the second highest of the five. Its low adjusted price does not make it more reliable than the unadjusted $258,000 sale.
Option D: The average of all five
Option D, the average of all five (about $258,480), treats all five sales as equally valid. That ignores the evidence that the $258,000 sale with 0.0% gross adjustment is the most comparable.
Least adjusted, most trusted
The sale needing the smallest gross adjustment is often the closest match to the subject.
How to use: Use this when a question gives gross adjustment percentages and asks which sale deserves the most weight.
Exam Tip
For best-indicator questions, compare gross adjustment percentages, not the adjusted prices themselves.
Common Mistakes to Avoid
- -Choosing the highest or lowest adjusted price as the best indicator
- -Averaging all sales equally regardless of comparability
- -Looking at net instead of gross adjustment to judge comparability
Concept Deep Dive
Analysis
This question tests how gross adjustment percentages signal comparability. The sale requiring the least absolute gross adjustment, as a percentage of sale price, is often the most comparable and should get the most weight. Scan the gross percentages and find the lowest.
Background Knowledge
Gross adjustment is the sum of all adjustments without regard to sign, often expressed as a percentage of the sale price. Lower gross adjustment generally means fewer and smaller differences from the subject and therefore greater comparability.
Real-World Application
In reconciling five adjusted sales, an appraiser notes one sale in the same tract with identical size and condition that required no adjustments. The appraiser gives that sale the most weight and explains why in the report.
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?
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Previous Question
A fourplex of two-bedroom units is the subject property. A nearby triplex of two-bedroom units of similar age and quality sold for $585,000 after being listed at $599,000. The triplex sale included a detached three-car garage, which market data show contributes $15,000; the subject has no garage. Buyers of small multi-unit buildings in this area pay a consistent price per unit for this unit type. What value does this sale indicate for the subject?
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