Three comparables produce adjusted indications of $312,000, $309,000 and $315,000, requiring gross adjustments of 9%, 14% and 22% respectively. Verification also establishes that the first sale is the closest competitive substitute and its adjustments are better supported than the other two. Which indication deserves the most weight on those facts?
Correct Answer
A) The first indication, because of verified competitive similarity and stronger adjustment support
The verified competitive similarity and stronger adjustment evidence support greater reliance on the first comparable. Its smaller gross percentage alone would not establish that result, and the coincidence that an arithmetic mean equals the same amount is not a reason to assign relative weight.
Why This Is the Correct Answer
The verified competitive similarity and stronger adjustment evidence support greater reliance on the first comparable. Its smaller gross percentage alone would not establish that result, and the coincidence that an arithmetic mean equals the same amount is not a reason to assign relative weight.
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Verified effective ages are 12 years for the subject and 18 years for the comparable. Market evidence supports an upward $2,400 per year when adjusting the older comparable to the subject’s lower effective age over this range. What signed adjustment results?
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The principle of contribution states that:
