The subject backs a golf course; no recent sale in the neighborhood shares that trait. The best support for a view adjustment is:
Correct Answer
C) Verified market data isolating the golf-course influence
Relevant verified paired comparisons can support a golf-course influence when other material differences are controlled. Broker opinions can supply information, but an unsupported opinion alone does not establish a dollar adjustment. Other credible analytical methods may also be appropriate.
Why This Is the Correct Answer
Option C is correct because verified, relevant comparisons that isolate the golf-course influence can show its price effect when other material differences are controlled. Paired sales analysis isolates a location influence by comparing sales affected by it with similar sales that are not. Other credible analytical methods may also be appropriate.
Why the Other Options Are Wrong
Option A: A standard view percentage drawn from an unrelated market
Option A, a standard view percentage from an unrelated market, is wrong because a figure from a different market may not reflect how local buyers value a golf-course location.
Option B: The seller’s desired premium without verification
Option B, the seller's desired premium without verification, is wrong because an interested party's unverified wish is not market evidence of an adjustment.
Option D: An arbitrary fraction of the golf club’s construction cost
Option D, an arbitrary fraction of the golf club's construction cost, is wrong because the club's cost does not measure how buyers value backing to the course, and an arbitrary fraction has no support.
Isolate it to support it
To support an adjustment, find verified sales that differ mainly in that one influence.
How to use: Use this when choosing the best support for a location or view adjustment.
Exam Tip
Prefer answers built on verified, relevant market comparisons over rules of thumb, opinions or cost formulas.
Common Mistakes to Avoid
- -Borrowing a percentage from an unrelated market
- -Relying on a seller's unverified premium
- -Basing the adjustment on amenity construction cost
Concept Deep Dive
Analysis
This question tests how to support an adjustment for a location influence when no neighborhood sale shares it. The strongest support comes from verified comparisons that isolate the influence, such as paired sales from relevant markets. Unverified opinions, outside rules of thumb and arbitrary formulas are not adequate support.
Background Knowledge
Location influences such as golf-course frontage, busy roads or nearby nuisances can be measured with paired sales comparing affected and unaffected properties. When the immediate neighborhood lacks such sales, appraisers may look to similar, competing areas. Opinions from market participants can inform but do not alone establish a dollar adjustment.
Real-World Application
A subject backs a golf course, but no recent neighborhood sale does. The appraiser finds similar golf-course and non-golf-course sales in a competing subdivision and uses them to support the adjustment.
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?
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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?
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