The subject has a 2-car garage; the comparable has a 3-car garage worth $8,000 more than a 2-car. The adjustment is:
Correct Answer
A) Minus $8,000 to the comparable's price
Why this is correct: Adjustments are made to the comparable's sale price to estimate the subject's value. Since the comparable has a superior feature (a 3-car garage versus a 2-car garage), its price must be reduced by the value difference ($8,000) to make it equivalent to the subject. Why the other choices are wrong: "Plus $8,000 to the comparable's price" would incorrectly increase the price for a superior feature, making the comparable seem even more valuable. "Minus $8,000 to the subject's value" misapplies the adjustment; the subject's value is the unknown being estimated, not adjusted. "No adjustment, since both have garages" ignores the quantitative difference in utility and value between a 2-car and 3-car garage. Exam tip: Always adjust the comparable. If the comp is better, subtract; if worse, add.
Why This Is the Correct Answer
Why this is correct: Adjustments are made to the comparable's sale price to estimate the subject's value. Since the comparable has a superior feature (a 3-car garage versus a 2-car garage), its price must be reduced by the value difference ($8,000) to make it equivalent to the subject. Why the other choices are wrong: "Plus $8,000 to the comparable's price" would incorrectly increase the price for a superior feature, making the comparable seem even more valuable. "Minus $8,000 to the subject's value" misapplies the adjustment; the subject's value is the unknown being estimated, not adjusted. "No adjustment, since both have garages" ignores the quantitative difference in utility and value between a 2-car and 3-car garage. Exam tip: Always adjust the comparable. If the comp is better, subtract; if worse, add.
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