Three comparables show net adjustments of +2%, -1% and +8%, and gross adjustments of 12%, 18% and 10% respectively. Which is the most reliable indication?
Correct Answer
D) The one at 10% gross, despite its net adjustment being the largest
Why this is correct: gross adjustment measures how much of the indication the appraiser supplied rather than observed, and 10% is the least of the three. Why the other choices are wrong: a -1% net can sit on top of an 18% gross, where large opposing adjustments cancel and hide the work done; the middle gross figure is not a reason for anything; and treating all three as equal ignores that one of them started out twice as unlike the subject as another.
Why This Is the Correct Answer
Why this is correct: gross adjustment measures how much of the indication the appraiser supplied rather than observed, and 10% is the least of the three. Why the other choices are wrong: a -1% net can sit on top of an 18% gross, where large opposing adjustments cancel and hide the work done; the middle gross figure is not a reason for anything; and treating all three as equal ignores that one of them started out twice as unlike the subject as another.
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A comparable property sold for $450,000 and has a swimming pool valued at $15,000 that the subject property lacks. What adjustment should be made to the comparable?
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An appraiser is analyzing a comparable sale that occurred 8 months ago. The market has been appreciating at 0.5% per month. If the comparable sold for $425,000, what is the time-adjusted sale price?