A comparable has an extra 200 sf garage relative to the subject. Verified market evidence supports a $32/sf contribution for this difference, while an earlier unsupported adjustment used $45/sf. What signed market-supported adjustment should replace it? No fixed materiality threshold or required addendum format is assumed.
Correct Answer
B) −$6,400
−200×32=−6400; previous −200×45=−9000. Common errors: keeping the earlier unsupported $45/sf rate gives −$9,000; dropping the adjustment as immaterial gives $0; reporting only the difference between the two rates gives −$2,600.
Why This Is the Correct Answer
Option B is correct because the comparable's extra 200 sf of garage at the supported $32/sf equals 200 × $32 = $6,400. Because the comparable is superior, the signed adjustment is −$6,400. This replaces the earlier unsupported −$9,000 based on $45/sf.
Why the Other Options Are Wrong
Option A: −$9,000
Option A is wrong because −$9,000 keeps the earlier unsupported $45/sf rate: −200 × $45 = −$9,000. Verified market evidence supports $32/sf, so the adjustment is −200 × $32 = −$6,400.
Option C: −$2,600
Option C is wrong because −$2,600 is only the difference between the two rates applied to the area: −200 × ($45 − $32) = −$2,600. The question asks for the full replacement adjustment, which is −200 × $32 = −$6,400.
Option D: $0
Option D is wrong because $0 drops the adjustment, as if the difference were too small to matter. No materiality threshold applies, and the comparable's extra garage area is supported at $32/sf, so the adjustment is −200 × $32 = −$6,400.
Replace, Don't Patch
When a rate is wrong, replace the whole adjustment with the supported figure rather than adjusting by the difference.
How to use: Use this reminder when a question gives both an old and a corrected rate.
Exam Tip
When two rates appear, check which one is market supported and apply that rate to the full difference with the proper sign.
Common Mistakes to Avoid
- -Keeping an unsupported rate because it was used before
- -Entering only the difference between old and new figures
- -Dropping a supported adjustment as immaterial
Concept Deep Dive
Analysis
This question tests replacing an unsupported adjustment with a market-supported one and using the correct sign. The comparable has the extra garage area, so it is superior and is adjusted down. The supported rate of $32/sf replaces the earlier $45/sf.
Background Knowledge
Adjustments should reflect market reaction and be supported by evidence such as paired sales or statistical analysis. When an earlier adjustment is found to be unsupported, it is replaced with a supported figure rather than partly corrected. The sign follows whether the comparable is superior or inferior to the subject.
Real-World Application
A reviewer flags that an appraiser's garage adjustment used a cost-based $45/sf rate with no market support. Paired sales show garage space contributes about $32/sf locally. The appraiser revises the comparable's adjustment from −$9,000 to −$6,400.
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?
Which of these is listed by Fannie Mae as a sales or financing concession?
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Paired resales of unchanged single-family homes in the neighborhood show prices rising at a steady pace. In a typical pair, a home sold for $320,000 ten months before the effective date and resold for $332,800 two months before it. Comparable 3 went under contract at $350,000 six months before the effective date. What market conditions adjustment applies to Comparable 3?
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