A comparable vacant site sold for a cash-equivalent $305,000. The subject is superior to the comparable in location, which calls for a +$12,000 adjustment, and inferior in topography, which calls for a −$7,000 adjustment. No other adjustments apply. What land value does sales comparison indicate?
Correct Answer
B) $310,000
Adjusted price = $305,000 + $12,000 − $7,000 = $310,000. The indicated result is $310,000. Common errors: reversing both adjustment signs gives $300,000; adding the topography adjustment instead of subtracting it gives $324,000; leaving out the topography adjustment gives $317,000.
Why This Is the Correct Answer
Option B is correct because the subject is superior in location (+$12,000) and inferior in topography (−$7,000), so $305,000 + $12,000 − $7,000 = $310,000.
Why the Other Options Are Wrong
Option A: $300,000
Option A ($300,000) reverses both signs: $305,000 − $12,000 + $7,000. Superior location adds to the comparable and inferior topography subtracts, giving $310,000.
Option C: $317,000
Option C ($317,000) leaves out the topography adjustment: $305,000 + $12,000. The −$7,000 must also be applied, giving $310,000.
Option D: $324,000
Option D ($324,000) adds the topography adjustment instead of subtracting it: $305,000 + $12,000 + $7,000. Because the subject is inferior in topography, the result is $305,000 + $12,000 − $7,000 = $310,000.
Subject better, add; worse, subtract
Compare the subject to the comparable for each element: a better subject adds, a worse subject subtracts.
How to use: Use this element by element before summing the net adjustment.
Exam Tip
Apply every listed adjustment and confirm each sign from the subject's position before adding.
Common Mistakes to Avoid
- -Reversing the sign of an adjustment
- -Omitting one of the adjustments
- -Adjusting the subject rather than the comparable
Concept Deep Dive
Analysis
This question tests signed adjustments to a comparable vacant sale. Each adjustment moves the comparable toward the subject: up where the subject is superior, down where it is inferior.
Background Knowledge
Adjustments are made to the comparable, not the subject. If the subject is better in an element, the comparable price rises; if worse, it falls. Adjustment amounts should be market-supported, for example through paired sales or statistical analysis.
Real-World Application
An appraiser compares a vacant lot to a recent sale on a less desirable street but with flatter terrain. The appraiser adds a location adjustment and subtracts a topography adjustment to reach the indicated value.
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