The subject is a hillside single-family home, and the appraiser is comparing it with three nearby sales. The homes differ in gross living area, site area, number of garage bays, and the quality of the view from the main living areas. Which difference is most likely to be analyzed by relative comparison, ranking each sale as superior, similar, or inferior, rather than by a unit-based adjustment?
Correct Answer
C) Quality of the view
View quality is an attribute, a qualitative characteristic that cannot be reduced to a unit such as square feet or a count, so it is the difference most suited to ranking sales as superior, similar, or inferior. Gross living area, site area, and garage bays are variables that reduce to a unit basis and are usually adjusted by a rate per unit.
Why This Is the Correct Answer
Option C is correct because view quality is a qualitative attribute that has no natural unit of measure. An appraiser can readily judge whether a comparable's view is better, similar, or worse than the subject's, which is exactly what relative comparison records.
Why the Other Options Are Wrong
Option A: Gross living area in square feet
Option A, gross living area in square feet, is a variable that reduces to a unit basis. It is commonly adjusted with a dollar rate per square foot drawn from market data, so it is not the difference most likely to be ranked qualitatively.
Option B: Site area in square feet
Option B, site area in square feet, is also a measurable variable. Market data can usually give a rate per square foot of site area, so a unit-based adjustment fits it better than a ranking.
Option D: Number of garage bays
Option D, number of garage bays, is a count, so it is a variable that reduces to a unit basis. Paired sales or similar data often yield a dollar amount per bay, which makes a unit-based adjustment the usual choice.
Count it or rank it
If you can count it or measure it, you can usually price it per unit. If you can only call it better or worse, rank it.
How to use: Use this to sort a list of differences into unit adjustments and qualitative rankings.
Exam Tip
Look for the one characteristic described by quality, appeal, or desirability rather than by a number or measurement.
Common Mistakes to Avoid
- -Assuming every difference needs a dollar adjustment
- -Treating measurable size differences as qualitative
Concept Deep Dive
Analysis
The question tests recognition of which property characteristics lend themselves to relative comparison. Measurable variables such as area and counts are usually adjusted by a dollar rate per unit. Qualitative attributes such as view, quality, and appeal are harder to price in dollars and are often ranked instead.
Background Knowledge
Physical characteristics are either variables, which can be reduced to a unit basis such as size or number of rooms, or attributes, which are qualitative such as condition or quality of design. Relative comparison analysis suits attributes because it ranks sales without stating dollar or percentage adjustments.
Real-World Application
In a hillside neighborhood, an appraiser adjusts for living area and garage size with market rates, but rates each sale's view as superior, similar, or inferior because no data isolate the view's dollar effect.
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
A comparable sold for a cash-equivalent price of $500,000. Signed dollar adjustments applied to the comparable are +$25,000 (GLA), −$10,000 (condition), and −$5,000 (garage). What are the net dollar adjustment and the gross dollar adjustment?
Next Question
A $260,000 comparable has signed adjustments of+$15,000 and −$8,000. What gross and signed net adjustment percentages of that original price result, each rounded to one decimal place?