Three comparable cash prices are $350,000, $340,000 and $360,000. Their respective total signed dollar adjustments are +$10,000,−$5,000 and −$15,000. What adjusted prices result in that order?
Correct Answer
D) $360,000; $335,000; $345,000
350000+10000=360000;340000−5000=335000;360000−15000=345000. Common errors: reversing the signs of the second and third adjustments gives $360,000; $345,000; $375,000; reversing every sign gives $340,000; $345,000; $375,000; not applying the adjustments gives $350,000; $340,000; $360,000.
Why This Is the Correct Answer
Option D is correct because $350,000 + $10,000 = $360,000; $340,000 − $5,000 = $335,000; and $360,000 − $15,000 = $345,000. Each signed adjustment is applied to its own comparable in the order given. The result is $360,000; $335,000; $345,000.
Why the Other Options Are Wrong
Option A: $360,000; $345,000; $375,000
Option A, $360,000; $345,000; $375,000, reverses the signs of the second and third adjustments: $340,000 + $5,000 = $345,000 and $360,000 + $15,000 = $375,000. Applying them as negatives gives $335,000 and $345,000.
Option B: $340,000; $345,000; $375,000
Option B, $340,000; $345,000; $375,000, reverses each sign: $350,000 − $10,000, $340,000 + $5,000 and $360,000 + $15,000. The correct results are $360,000; $335,000; $345,000.
Option C: $350,000; $340,000; $360,000
Option C, $350,000; $340,000; $360,000, simply repeats the unadjusted prices. Applying the +$10,000, −$5,000 and −$15,000 adjustments gives $360,000; $335,000; $345,000.
Sign travels with the number
Add each adjustment exactly as signed to its own comparable; a minus sign means subtract.
How to use: Use this when working any multi-comparable adjustment grid.
Exam Tip
Work each comparable separately and match the answer order to the order in the stem.
Common Mistakes to Avoid
- -Flipping the sign of a negative adjustment
- -Mixing up which adjustment goes with which comparable
- -Reporting the unadjusted prices
Concept Deep Dive
Analysis
This question tests applying signed adjustments to several comparables in order. Each comparable's total signed adjustment is added to its own price. Keeping the signs and order straight is the core skill.
Background Knowledge
Each comparable's adjusted price equals its sale price plus the sum of its signed adjustments. A positive total means the comparable was inferior overall; a negative total means it was superior overall. Adjusted prices then feed into reconciliation.
Real-World Application
An appraiser completes a three-comparable grid and totals the adjustments for each sale. Applying the signed totals gives a tight range of adjusted prices that the appraiser then reconciles.
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