A supported unit-comparison model gives a preliminary $150/sqft indication for a subject of 2,200 sqft. It excludes a separate market-supported +$8,000 difference, which has not yet been counted. What indication results after applying that difference once?
Correct Answer
C) $338,000
150 × 2200 + 8000 = 338000. The unit model and separate adjustment are stipulated compatible and do not double count the same feature. A total-price-per-area rate is not automatically an appropriate marginal adjustment.
Why This Is the Correct Answer
Option C is correct because $150 × 2,200 = $330,000, and adding the separate market-supported +$8,000 once gives $338,000. The stem states the difference is excluded from the unit model, so adding it does not double count. Each part has its own support.
Why the Other Options Are Wrong
Option A: $330,000
Option A shows $330,000, which is $150 × 2,200 with the +$8,000 difference left out. The stem says that difference has not yet been counted, so the indication is $338,000.
Option B: $322,000
Option B shows $322,000, which subtracts the difference: $330,000 − $8,000. The stem gives a positive $8,000 difference, so it is added, giving $338,000.
Option D: $346,000
Option D shows $346,000, which adds the difference twice: $330,000 + $8,000 + $8,000. The stem says to apply it once, giving $338,000.
Count it once
Each feature gets counted one time: either in the unit rate or as a separate adjustment.
How to use: Use this when combining a unit-price indication with an extra adjustment.
Exam Tip
Read whether the extra item is already included in the unit rate; that determines whether you add it.
Common Mistakes to Avoid
- -Forgetting to add a separately supported item
- -Double counting a feature already in the unit rate
- -Using a total-price-per-area rate as a marginal adjustment without support
Concept Deep Dive
Analysis
This question tests applying a unit-of-comparison indication and a separate adjustment without double counting. The unit model gives $150 per square foot for 2,200 square feet, and an $8,000 difference not captured in the model is added once. The stem stipulates the two are compatible.
Background Knowledge
Units of comparison express sale prices in common terms, such as price per square foot. When a unit indication omits a feature, a separate supported adjustment can be applied. Care is needed so a feature is not counted both in the unit rate and as a separate adjustment.
Real-World Application
An appraiser's price-per-square-foot analysis uses comparables without pools, while the subject has a pool supported at $8,000 by paired sales. She multiplies the unit rate by the subject's area and adds the pool contribution once.
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