An appraiser is completing a URAR form and notes that the subject property has a detached garage while comparable sales have attached garages. The market analysis indicates a $5,000 adjustment is appropriate. How should this adjustment be applied?
Correct Answer
D) Subtract $5,000 from the comparable sales prices
Why this is correct: The adjustment principle: adjust the comparable to the subject. A superior feature in the comparable (attached garage) requires a downward adjustment to its price. Why the other choices are wrong: Adding to the subject value incorrectly adjusts the subject. No adjustment ignores a market-supported difference. Adding to the comparable sales prices makes the comparable even more superior. Exam tip: Always adjust the comparable to match the subject; subtract for superior features in the comp.
Why This Is the Correct Answer
Option B is correct because the comparable properties have attached garages (superior feature) while the subject has a detached garage (inferior feature). Since the comparable is superior in this aspect, we must subtract $5,000 from the comparable's sale price to adjust it downward to reflect the subject's lesser garage situation. This adjustment makes the comparable more similar to the subject property for comparison purposes.
Why the Other Options Are Wrong
CBS Rule - Comparable Better Subtract
CBS: When the Comparable is Better than the Subject, Subtract from the comparable. CWS: When the Comparable is Worse than the Subject, add (W looks like upward arrow for addition).
How to use: When you see an adjustment question, first identify which property has the superior feature, then apply CBS or CWS to determine whether to add or subtract from the comparable.
Exam Tip
Always remember that adjustments flow in one direction only - from comparable TO subject. Never adjust the subject property value in sales comparison approach questions.
Common Mistakes to Avoid
- -Adjusting the subject property instead of the comparable
- -Adding money when you should subtract (or vice versa)
- -Forgetting that adjustments always make comparables more similar to the subject
Concept Deep Dive
Analysis
This question tests the fundamental principle of sales comparison adjustments in real estate appraisal. The key concept is that adjustments are always made TO the comparable properties to make them more similar to the subject property, not the other way around. When a comparable has a superior feature compared to the subject, you must subtract value from that comparable's sale price. Conversely, when a comparable has an inferior feature compared to the subject, you add value to that comparable's sale price.
Background Knowledge
In the sales comparison approach, all adjustments are made to the comparable sales, never to the subject property. The goal is to adjust each comparable to reflect what it would have sold for if it had the same characteristics as the subject property.
Real-World Application
In practice, appraisers constantly make these adjustments when completing URAR forms. An attached garage typically adds convenience and weather protection compared to a detached garage, making it more valuable in most markets.
More Sales Comparison Questions
An appraiser is analyzing three comparable sales with the following data: Sale 1: $350,000 with +$10,000 adjustments; Sale 2: $340,000 with -$5,000 adjustments; Sale 3: $360,000 with -$15,000 adjustments. What are the adjusted sale prices?
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