Four land sales are available. Which would normally be given the most weight?
Correct Answer
A) The one needing the fewest and smallest adjustments
Why this is correct: In sales comparison, the sale requiring the fewest and smallest adjustments is typically given the most weight because it is the most similar to the subject property. Each adjustment introduces judgment and potential error, so a sale needing minimal adjustment provides the most direct and reliable evidence of market value. Why the other choices are wrong: The one that sold at the highest price per square foot may be an outlier or have unique features, not necessarily the best indicator. The one that closed most recently, whatever its location, ignores critical location differences that can outweigh recency. The one whose price falls in the middle of the range has no inherent reliability; the market's answer is not necessarily the median. Exam tip: Prioritize comparability over recency or price level when weighting sales.
Why This Is the Correct Answer
Why this is correct: In sales comparison, the sale requiring the fewest and smallest adjustments is typically given the most weight because it is the most similar to the subject property. Each adjustment introduces judgment and potential error, so a sale needing minimal adjustment provides the most direct and reliable evidence of market value. Why the other choices are wrong: The one that sold at the highest price per square foot may be an outlier or have unique features, not necessarily the best indicator. The one that closed most recently, whatever its location, ignores critical location differences that can outweigh recency. The one whose price falls in the middle of the range has no inherent reliability; the market's answer is not necessarily the median. Exam tip: Prioritize comparability over recency or price level when weighting sales.
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A proposed subdivision site has frontage on two non-parallel streets, resulting in irregular lot shapes and varying depths. When estimating lot values for the land residual calculation, the appraiser adjusts comparable lot sales using depth tables. Which principle most directly supports the use of such adjustments?