A verified pair of cash-equivalent sales in the same market has the superior covered front porch at $582,000 and a matched property lacking it at $558,000. Rights, terms, time and other material characteristics are matched. A suitable comparable sold for $570,000. The subject is inferior in this same feature; the comparable is superior. Assume the observed contribution applies and no other adjustments. What signed covered front porch adjustment and adjusted comparable price result?
Correct Answer
B) −$24,000; $546,000
Pair difference=582000−558000=24000; adjustment=-24000; comparable price=570000+(-24000)=546000. Adjust the comparable toward the subject using the stipulated applicable market contribution, not installation cost or a price inferred solely from the feature label.
Why This Is the Correct Answer
Option B is correct because the pair difference is $582,000 - $558,000 = $24,000. The comparable has the superior porch, so the adjustment is -$24,000, and $570,000 - $24,000 = $546,000.
Why the Other Options Are Wrong
Option A: +$24,000; $594,000
Option A, +$24,000 and $594,000, uses the right amount but the wrong sign. Adding $24,000 to $570,000 treats the comparable as inferior, when it is actually superior and must be adjusted down to $546,000.
Option C: +$0; $570,000
Option C, +$0 and $570,000, makes no adjustment even though the paired sale shows a $24,000 contribution that the stem says applies. The supported result is -$24,000 and $546,000.
Option D: −$24,000; $534,000
Option D, −$24,000 and $534,000, has the right signed adjustment but subtracts it from the inferior pair sale's $558,000 price instead of the comparable's $570,000 price: $558,000 − $24,000 = $534,000. The adjustment belongs on the comparable, so the result is $570,000 − $24,000 = $546,000.
CBS: Comp Better, Subtract
If the comp is better than the subject, subtract; if the comp is inferior, add. The adjustment moves the comp toward the subject.
How to use: Use this to set the sign of any sales comparison adjustment.
Exam Tip
After choosing the sign, check that the adjusted price equals the comparable's own sale price plus the signed adjustment, not a pair sale's price.
Common Mistakes to Avoid
- -Adjusting the subject instead of the comparable
- -Adding the adjustment when the comparable is superior
- -Applying the adjustment to a pair sale's price instead of the comparable's
- -Using installation cost instead of the market-derived contribution
Concept Deep Dive
Analysis
This question tests extracting a feature contribution from a paired sale and applying it with the correct sign. Adjustments are made to the comparable to make it look like the subject. Because the comparable is superior in the porch feature, its price is reduced.
Background Knowledge
Paired sales analysis compares two otherwise matched sales that differ in one feature to measure that feature's market contribution. Adjustments are always applied to the comparable, not the subject. A superior comparable gets a negative adjustment, and an inferior comparable gets a positive one.
Real-World Application
An appraiser finds two matched sales in the subject's neighborhood that differ only by a covered front porch, with a $24,000 price difference. A comparable has the porch while the subject does not, so the appraiser deducts $24,000 from the comparable's price.
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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