In what order are adjustments properly applied to a comparable's price?
Correct Answer
C) Transactional adjustments first, then market conditions, then property adjustments
Why this is correct: Transactional adjustments (financing, sale conditions) are made first to normalize the price to market terms, then market conditions (time), then property differences (location, physical). Why the other choices are wrong: 'Physical feature adjustments first, then financing terms, then market conditions last' reverses the proper sequence. 'Largest dollar adjustment first, down to the smallest' is arbitrary and can distort results due to compounding. 'Order is irrelevant since the total is the same' is false; percentage adjustments compound, so order matters. Exam tip: Remember the sequence: transactional → market conditions → property.
Why This Is the Correct Answer
Why this is correct: Transactional adjustments (financing, sale conditions) are made first to normalize the price to market terms, then market conditions (time), then property differences (location, physical). Why the other choices are wrong: 'Physical feature adjustments first, then financing terms, then market conditions last' reverses the proper sequence. 'Largest dollar adjustment first, down to the smallest' is arbitrary and can distort results due to compounding. 'Order is irrelevant since the total is the same' is false; percentage adjustments compound, so order matters. Exam tip: Remember the sequence: transactional → market conditions → property.
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