The subject has an additional bathroom contribution of $5,000 relative to a comparable, as supported by relevant market analysis. What signed adjustment applies to the comparable for this difference only?
Correct Answer
C) $5,000
The comparable lacks the subject’s supported bathroom contribution; adjustment toward subject = +5000. Common errors: adjusting downward instead of upward gives −$5,000; concluding that no adjustment is needed gives $0; counting the contribution twice gives $10,000.
Why This Is the Correct Answer
Option C is correct because the comparable lacks the subject's additional bathroom, which the market shows contributes $5,000. Adjustments are made to the comparable to reflect the subject, so the comparable receives +$5,000. This moves its price toward what it would have sold for with the subject's bathroom count.
Why the Other Options Are Wrong
Option A: −$5,000
Option A, −$5,000, has the wrong sign. A comparable that lacks a feature the subject has is inferior and is adjusted upward, so the adjustment is +$5,000.
Option B: $0
Option B, $0, wrongly concludes no adjustment is needed. The market analysis supports a $5,000 contribution for the bathroom the comparable lacks, so a +$5,000 adjustment applies.
Option D: $10,000
Option D, $10,000, counts the contribution twice (2 × $5,000). The supported difference is one bathroom worth $5,000, so the adjustment is +$5,000.
CBS: Comp Better, Subtract
If the comparable is better than the subject, subtract; if the comparable is inferior, add.
How to use: Use this to set the sign of each line item on an adjustment grid.
Exam Tip
Ask which property has the feature. If the subject has it and the comparable does not, the comparable's adjustment is positive.
Common Mistakes to Avoid
- -Subtracting from a comparable that lacks a feature the subject has
- -Doubling the adjustment by applying it to both the subject and the comparable
- -Skipping a supported adjustment because the amount seems small
Concept Deep Dive
Analysis
This question tests adjustment direction. The subject has an extra bathroom the comparable lacks, so the comparable is inferior on this feature. An inferior comparable is adjusted upward by the supported contribution, here $5,000.
Background Knowledge
In the sales comparison approach, each comparable is adjusted to reflect the subject's characteristics. When the subject has a feature the comparable lacks, the comparable's price is adjusted upward by the feature's supported market contribution. Contributions can be supported by paired sales, statistical analysis or other market methods.
Real-World Application
A subject has three bathrooms while a comparable has two. Paired sales show a bathroom contributes about $5,000 in this market, so the appraiser adds $5,000 to the comparable on the grid.
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