In appraising a condominium unit, the strongest comparables are usually:
Correct Answer
A) Other units in the same project or a directly competing one
Why this is correct: The sales comparison approach requires the most similar comparables to minimize adjustments. Units in the same or a directly competing project share critical, hard-to-adjust-for attributes: the same homeowners association (HOA), amenities, management, and physical location. This holds these factors constant, providing the strongest evidence of value. Why the other choices are wrong: "Detached homes at the same price point" are a different property type with different ownership rights and utility. "Units located in projects across the metropolitan area" vary widely in location, HOA quality, and amenities, requiring large, unreliable adjustments. "Rental apartments of similar size nearby" represent a different ownership interest (leased fee) and lack the condominium ownership structure. Exam tip: For condos, the best comps are always within the same project first, then a directly competing one. Look for shared HOA and amenities.
Why This Is the Correct Answer
Why this is correct: The sales comparison approach requires the most similar comparables to minimize adjustments. Units in the same or a directly competing project share critical, hard-to-adjust-for attributes: the same homeowners association (HOA), amenities, management, and physical location. This holds these factors constant, providing the strongest evidence of value. Why the other choices are wrong: "Detached homes at the same price point" are a different property type with different ownership rights and utility. "Units located in projects across the metropolitan area" vary widely in location, HOA quality, and amenities, requiring large, unreliable adjustments. "Rental apartments of similar size nearby" represent a different ownership interest (leased fee) and lack the condominium ownership structure. Exam tip: For condos, the best comps are always within the same project first, then a directly competing one. Look for shared HOA and amenities.
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A grid with five comparables, three tightly clustered and two far apart, suggests:
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An appraiser develops a $3,200 adjustment for a fireplace based on a single paired sale. The subject has a fireplace; Comparable A does not. The appraiser applies +$3,200 to Comparable A. Later, the appraiser identifies a second pair showing a $4,600 fireplace contribution. The appraiser replaces the original adjustment with $3,900 — the simple average — and applies it to Comparable A. What is the appropriate USPAP-compliant action regarding the adjustment amount?