A verified pair of cash-equivalent sales in the same market has C2 at $640,000 and C5 at $568,000. Rights, terms, time and other material characteristics are matched. A suitable comparable sold for $615,000. The subject is C5; the comparable is C2. Assume the observed contribution applies and no other adjustments. What signed condition adjustment and adjusted comparable price result?
Correct Answer
A) −$72,000; $543,000
Pair difference=640000−568000=72000; adjustment=-72000; comparable price=615000+(-72000)=543000. Lower numerical C denotes better condition; rating steps do not define fixed dollar adjustments. 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 A is correct because the pair difference is $640,000 − $568,000 = $72,000. The comparable is C2, better than the C5 subject, so the adjustment is −$72,000. The adjusted price is $615,000 − $72,000 = $543,000.
Why the Other Options Are Wrong
Option B: +$72,000; $687,000
Option B shows +$72,000 and $687,000, which is $615,000 + $72,000. It adjusts upward, treating the C2 comparable as inferior, but a lower C rating means better condition, so the adjustment is −$72,000 and the result is $543,000.
Option C: +$0; $615,000
Option C shows +$0 and $615,000, making no condition adjustment. The verified pair supports a $72,000 difference that the stem says applies, so the comparable should be adjusted to $543,000.
Option D: −$72,000; $496,000
Option D, −$72,000 and $496,000, has the right signed adjustment but subtracts it from the C5 pair sale's $568,000 price instead of the comparable's $615,000 price: $568,000 − $72,000 = $496,000. The adjustment belongs on the comparable, so the result is $615,000 − $72,000 = $543,000.
Lower C, better condition
C ratings rank like race finishes: C1 is first place, so a lower number is better.
How to use: Use this to decide which property is superior before signing a condition adjustment.
Exam Tip
Identify which property is superior first, then sign the adjustment; a correct amount with the wrong price or sign is a common trap.
Common Mistakes to Avoid
- -Reading a higher C number as better condition
- -Adding the adjustment to a superior comparable
- -Applying the adjustment to the pair's sale price instead of the comparable's
Concept Deep Dive
Analysis
This question tests extracting a condition adjustment from a paired sale and applying it in the right direction. In UAD condition ratings, a lower number means better condition, so C2 is superior to C5. The comparable at C2 is superior to the C5 subject and is adjusted downward.
Background Knowledge
UAD condition ratings run from C1 (best) to C6 (worst). Paired sales that match in all respects except condition can indicate the market's reaction to a condition difference. Adjustments are made toward the subject: down for a superior comparable and up for an inferior one.
Real-World Application
The subject needs significant repairs and is rated C5, while a comparable was recently renovated and rated C2. Using a verified pair showing a $72,000 condition difference, the appraiser subtracts that amount 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?
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In a neighborhood with declining values and marketing times over six months, what must Fannie Mae lenders confirm about the sales comparison analysis?
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