In a market where 40% of transactions close with seller concessions averaging 2%, a comparable with no concessions:
Correct Answer
C) May need no concession adjustment — it is already a clean price
Why this is correct: A comparable with no concessions reflects a clean price; if the subject also has no concessions, no adjustment is needed. Adjustments correct differences, not deviations from an average. Why the other choices are wrong: Must be adjusted upward by the market's average concession rate is wrong; you adjust comparables with concessions, not clean ones. Should be excluded as unrepresentative of current conditions is incorrect; clean sales are valid data. Requires a downward adjustment for its favorable clean terms is false; favorable terms don't warrant a downward adjustment. Exam tip: Adjust for differences from the subject, not from market averages.
Why This Is the Correct Answer
Why this is correct: A comparable with no concessions reflects a clean price; if the subject also has no concessions, no adjustment is needed. Adjustments correct differences, not deviations from an average. Why the other choices are wrong: Must be adjusted upward by the market's average concession rate is wrong; you adjust comparables with concessions, not clean ones. Should be excluded as unrepresentative of current conditions is incorrect; clean sales are valid data. Requires a downward adjustment for its favorable clean terms is false; favorable terms don't warrant a downward adjustment. Exam tip: Adjust for differences from the subject, not from market averages.
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