Relevant verified analysis establishes that this comparable’s attached configuration carries a $5,000 premium over the otherwise equivalent detached subject in this market. What signed configuration adjustment applies to the comparable?
Correct Answer
B) −$5,000
Remove the supported comparable premium: adjustment = −5000. Common errors: adjusting upward instead of downward gives $5,000; concluding that no adjustment is needed gives $0; deducting the contribution twice gives −$10,000.
Why This Is the Correct Answer
Option B is correct because the comparable carries a supported $5,000 premium over the otherwise equivalent subject, making it superior. Adjustments are made to the comparable, so the premium is removed: adjustment = −$5,000. This brings the comparable's price in line with the subject's configuration.
Why the Other Options Are Wrong
Option A: −$10,000
Option A, −$10,000, comes from deducting the $5,000 contribution twice (−2 × $5,000). The premium is removed only once, giving −$5,000.
Option C: $0
Option C, $0, assumes no adjustment is needed. The facts state a verified $5,000 market premium for the comparable's configuration, so ignoring it leaves the comparable overstated; the correct adjustment is −$5,000.
Option D: $5,000
Option D, $5,000, uses the right amount but the wrong direction. A premium on the comparable makes it superior, so the adjustment is −$5,000, not +$5,000.
Remove the comp's premium
If the market pays extra for the comparable's feature, take that extra off the comparable.
How to use: Use this whenever a question says the comparable carries a premium over the subject.
Exam Tip
Do not assume attached or detached is always better; follow the market evidence stated in the question and apply it to the comparable.
Common Mistakes to Avoid
- -Adjusting the comparable upward for a premium it carries
- -Applying a single adjustment twice
- -Assuming detached homes are worth more without checking the market
Concept Deep Dive
Analysis
This question tests the sign of an adjustment when the comparable has a feature the market pays a premium for. The comparable's attached configuration carries a supported $5,000 premium over the detached subject, so the comparable is superior on this element. Removing that premium gives an adjustment of −$5,000.
Background Knowledge
Adjustments are made to the comparable's price to show what it would have sold for with the subject's characteristics. When a comparable has a feature the market values more, its price is reduced by that feature's supported contribution. Whether a feature such as configuration carries a premium or discount depends on the specific market evidence.
Real-World Application
In a market where attached units near a transit hub sell at a small premium, an appraiser values a detached home using an attached comparable. Paired data show the attached configuration carries about $5,000 more in this market. The appraiser enters −$5,000 on the comparable's grid line.
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