Which statement best describes sound adjustment sequencing in a national sales-comparison analysis?
Correct Answer
D) Use one consistent base per adjustment; avoid double counting
Comparison requires aligning rights, transaction terms, timing and relevant property differences using explicit and consistent bases. A prescribed list from a particular instructional source is not a universal USPAP sequence. Percentage and dollar adjustments must be applied to their stated bases without double counting.
Why This Is the Correct Answer
Option D is correct because sound comparison applies each adjustment to an explicit, consistent base and avoids double counting. Percentage and dollar adjustments must be applied to their stated bases. Elements of comparison such as property rights, financing terms, conditions of sale and market conditions are each considered once.
Why the Other Options Are Wrong
Option A: USPAP prescribes one numbered six-step sequence for adjustments
Option A, claiming USPAP prescribes one numbered six-step sequence, is wrong because suggested sequences come from instructional sources, not a universal USPAP requirement.
Option B: Apply each percentage adjustment to the final adjusted price
Option B, applying each percentage adjustment to the final adjusted price, is wrong because each percentage must be applied to its stated base. Applying all of them to the final price distorts the results.
Option C: Financing terms and personal property do not affect the comparison
Option C, saying financing terms and personal property do not affect the comparison, is wrong because financing terms are a recognized element of comparison, and non-real property items can affect a sale price.
State the base, count once
For each adjustment, know what base it applies to and make sure no difference is adjusted twice.
How to use: Use this to check any combined percentage and dollar adjustment grid.
Exam Tip
Be cautious of options claiming USPAP mandates a specific numbered sequence; look for consistency and avoiding double counting.
Common Mistakes to Avoid
- -Believing USPAP mandates one numbered adjustment order
- -Applying all percentage adjustments to the final price
- -Ignoring financing terms or personal property in the sale
Concept Deep Dive
Analysis
This question tests the principle behind adjustment sequencing rather than a memorized list. Sound analysis aligns rights, terms, timing and property differences using clear, consistent bases for each adjustment. It also avoids counting the same difference twice.
Background Knowledge
Recognized elements of comparison include property rights conveyed, financing terms, conditions of sale, expenditures made immediately after purchase and market conditions, followed by property characteristics. Instructional texts offer suggested sequences, but the key is a consistent, explained method. Double counting occurs when one difference is captured by two adjustments.
Real-World Application
An appraiser adjusts a comparable for seller-paid costs, then for market conditions, then for size. The appraiser checks that the size adjustment does not also capture a room-count difference already adjusted separately.
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?
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Previous Question
Two verified sales are alike in every respect except that one has a two-car garage. They sold for $265,000 (with garage) and $252,000 (without). A comparable lacks the garage that the subject has. What adjustment does this pair indicate?
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The subject backs a golf course; no recent sale in the neighborhood shares that trait. The best support for a view adjustment is: