A controlled cash-equivalent pair isolates a feature:with it $425,000, without it $412,000. The subject has it and the comparable lacks it. What signed adjustment applies to the comparable?
Correct Answer
D) $13,000
425000−412000=13000; adjustment to the inferior comparable = +13000. Common errors: adjusting downward instead of upward gives −$13,000; concluding that no adjustment is needed gives $0; splitting the paired difference in half gives $6,500.
Why This Is the Correct Answer
Option D is correct because the paired sales show the feature contributes 425,000 − 412,000 = $13,000. The comparable lacks the feature the subject has, so it is inferior and is adjusted upward by $13,000. Adjustments move the comparable toward the subject.
Why the Other Options Are Wrong
Option A: −$13,000
Option A, −$13,000, is wrong because it adjusts downward instead of upward. A comparable lacking a feature the subject has is inferior, so the $13,000 contribution is added, not subtracted.
Option B: $0
Option B, $0, is wrong because it concludes no adjustment is needed. The controlled pair isolates a $13,000 contribution, and the comparable lacks the feature, so a +$13,000 adjustment applies.
Option C: $6,500
Option C, $6,500, is wrong because it splits the paired difference in half: (425,000 − 412,000) ÷ 2 = 6,500. The full difference of $13,000 is the feature's contribution, so the adjustment is +$13,000.
CIA: Comparable Inferior, Add
If the comparable is inferior to the subject, add; if the comparable is superior, subtract.
How to use: Use this to set the sign of grid adjustments.
Exam Tip
Decide first whether the comparable is better or worse than the subject, then apply the sign.
Common Mistakes to Avoid
- -Subtracting when the comparable is inferior
- -Halving the paired difference for no reason
- -Adjusting the subject instead of the comparable
Concept Deep Dive
Analysis
This question tests deriving an adjustment from a paired sale and applying the correct sign. The pair shows the feature contributes $13,000. Because the comparable lacks a feature the subject has, the comparable is inferior and needs an upward adjustment.
Background Knowledge
Paired sales analysis compares sales that differ mainly in one feature to isolate that feature's contribution. Adjustments are made to the comparable, toward the subject. An inferior comparable gets a positive adjustment and a superior comparable gets a negative one.
Real-World Application
An appraiser finds two otherwise identical sales, one with a finished basement at $425,000 and one without at $412,000. The subject has a finished basement, and a comparable does not. The appraiser adds $13,000 to that 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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Previous Question
A comparable’s $420,000 price expressly equals 105% of its supported price in the subject’s location, with all else unchanged. What subject-location-equivalent price removes that premium? Do not deduct 5% of the already higher amount.
Next Question
Two cash-equivalent sales are otherwise identical and both rated C3 under UAD 2.6. The Q4 sale sold for $485,000 and the Q3 sale for $510,000. The subject is rated Q4/C3. What quality adjustment applies to the Q3 comparable, and what is its adjusted price?