Two cash-equivalent sales are otherwise identical and both rated C3 under UAD 2.6. The Q4 sale sold for $485,000 and the Q3 sale for $510,000. The subject is rated Q4/C3. What quality adjustment applies to the Q3 comparable, and what is its adjusted price?
Correct Answer
A) −$25,000; $485,000
510000−485000=25000; Q3 is higher quality than Q4; 510000−25000=485000.
Why This Is the Correct Answer
Option A is correct because the pair shows a quality difference of 510,000 − 485,000 = $25,000, and the Q3 comparable is superior to the Q4 subject. A superior comparable is adjusted downward, so the adjustment is −$25,000. The adjusted price is 510,000 − 25,000 = $485,000.
Why the Other Options Are Wrong
Option B: +$25,000; $535,000
Option B, +$25,000; $535,000, is wrong because it adjusts in the wrong direction: 510,000 + 25,000 = 535,000. Q3 is higher quality than the Q4 subject, so the comparable is superior and the adjustment is −$25,000, giving $485,000.
Option C: −$25,000; $460,000
Option C, −$25,000; $460,000, has the right adjustment but applies it to the wrong price: 485,000 − 25,000 = 460,000. The adjustment applies to the Q3 comparable's $510,000 price, giving $485,000.
Option D: $0; $510,000
Option D, $0; $510,000, is wrong because it makes no quality adjustment. The subject is Q4 and the comparable is Q3, and the pair shows a $25,000 difference, so a −$25,000 adjustment applies.
Lower Q number, higher quality
In UAD, Q1 is best, so Q3 beats Q4; a better comparable gets a minus adjustment.
How to use: Use this to set the direction of quality adjustments with UAD ratings.
Exam Tip
Translate the Q ratings into superior or inferior before choosing a sign.
Common Mistakes to Avoid
- -Reading a higher Q number as higher quality
- -Adding the adjustment to a superior comparable
- -Applying the adjustment to the wrong sale price
Concept Deep Dive
Analysis
This question combines UAD quality ratings with paired-sale adjustment direction. In UAD, a lower Q number means higher quality, so Q3 is superior to Q4. The Q3 comparable must be adjusted downward toward the Q4 subject by the paired difference.
Background Knowledge
UAD quality ratings run from Q1 (highest) to Q6 (lowest), and condition ratings run from C1 to C6. A lower number indicates a better rating. Adjustments are made to the comparable, toward the subject, with superior comparables adjusted downward.
Real-World Application
An appraiser rates the subject Q4 and finds a Q3 comparable with better finishes. A matched pair in the neighborhood shows a $25,000 price difference between Q3 and Q4 homes. The appraiser adjusts the Q3 comparable down by $25,000.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
A house is a 4,000 square foot home in an area of 2,000 square foot homes. How must the appraiser treat this over-improvement in the sales comparison grid?
According to the Interagency Appraisal and Evaluation Guidelines, which items should an appraisal’s market conditions discussion include?
A comparable listed at $420,000 and sold for $399,000. What sale-to-list price ratio (sale price ÷ list price) does this indicate?
An appraiser wants to describe the neighborhood boundaries in a Fannie Mae report. Which approach is acceptable?
Which of these is listed by Fannie Mae as a sales or financing concession?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Previous Question
A controlled cash-equivalent pair isolates a feature:with it $425,000, without it $412,000. The subject has it and the comparable lacks it. What signed adjustment applies to the comparable?
Next Question
A verified pair of cash-equivalent sales in the same market has Q3/C3 at $548,000 and Q4/C3 at $513,000. Rights, terms, time and other material characteristics are matched. A suitable comparable sold for $513,000. The subject is Q3/C3; the comparable is Q4/C3. Assume the observed contribution applies and no other adjustments. What signed quality adjustment and adjusted comparable price result?