A verified pair of cash-equivalent sales in the same market has Q2/C3 at $648,000 and Q5/C3 at $558,000. Rights, terms, time and other material characteristics are matched. A suitable comparable sold for $520,000. The subject is Q2/C3; the comparable is Q5/C3. Assume the observed contribution applies and no other adjustments. What signed quality adjustment and adjusted comparable price result?
Correct Answer
B) +$90,000; $610,000
Pair difference=648000−558000=90000; adjustment=90000; comparable price=520000+(90000)=610000. Lower numerical Q denotes higher construction quality; it does not specify a universal dollar premium. 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 matched pair indicates $90,000 for the quality difference, and an inferior comparable is adjusted upward toward the subject. The result is $520,000 + $90,000 = $610,000. Lower numerical Q ratings denote higher construction quality, so the Q5 comparable is inferior to the Q2 subject.
Why the Other Options Are Wrong
Option A: −$90,000; $430,000
Option A is wrong because -$90,000 and $430,000 apply the adjustment in the wrong direction: $520,000 - $90,000 = $430,000. The comparable is inferior, so the adjustment is added, giving $610,000.
Option C: +$0; $520,000
Option C is wrong because +$0 and $520,000 ignore the quality difference the pair measured. The stem states the observed $90,000 contribution applies, so a +$90,000 adjustment to $610,000 is required.
Option D: +$90,000; $648,000
Option D is wrong because +$90,000 with $648,000 uses the right adjustment but reports the Q2 pair sale's price instead of the adjusted comparable. Adding $90,000 to the comparable's $520,000 gives $610,000, not $648,000.
CIA: Comparable Inferior, Add
When the Comparable is Inferior, Add; when the comparable is superior, subtract. The adjustment moves the comparable toward the subject.
How to use: Use CIA to set the sign of any adjustment in a sales grid.
Exam Tip
Do the pair difference first, then decide the sign by asking whether the comparable is better or worse than the subject.
Common Mistakes to Avoid
- -Subtracting the adjustment from an inferior comparable
- -Reading Q5 as higher quality than Q2
- -Reporting a paired sale's price instead of the adjusted comparable price
Concept Deep Dive
Analysis
This question tests deriving an adjustment from a paired sale and applying it in the correct direction. The pair shows the Q2 quality level contributing $648,000 - $558,000 = $90,000 over Q5. Because the comparable (Q5) is inferior to the subject (Q2), the adjustment is positive: $520,000 + $90,000 = $610,000.
Background Knowledge
Paired sales analysis isolates the price effect of one difference by comparing sales that are alike in other respects. The comparable is adjusted toward the subject: added when the comparable is inferior, subtracted when superior. UAD quality ratings run from Q1 (highest) to Q6 (lowest).
Real-World Application
An appraiser finds two recent tract sales identical except for finish quality, selling $90,000 apart. Valuing a higher-quality subject, she adds $90,000 to a lower-quality comparable after confirming the pair reflects the same market.
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?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Previous Question
The adjusted comparable indications in an appraisal are $296,000, $301,000 and $304,000. The appraiser has no information on differences in reliability and has assigned no weights. What can be concluded from these figures alone?
Next Question
Leases signed this year show similar homes rent for $2,325 per month with two full baths and $2,200 with one. The subject property has two full baths, and a comparable sale has one. A two-bath home currently advertised for rent is asking $2,400. Market participants quote gross rent multipliers on annual rent. A one-bath home in the area, leased at $2,200 per month, sold last month for $343,200. A contractor has bid $24,000 to add a bathroom to a similar home. What adjustment is indicated for the second bath?