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?
Correct Answer
A) $259,000
The comparable is inferior by one garage space (+$3,500) and superior for the pool/spa (−$12,500): $268,000 + $3,500 − $12,500 = $259,000. Reversing one or both signs produces the other choices.
Why This Is the Correct Answer
Option A is correct because the comparable is inferior by one garage space (+$3,500) and superior for the pool/spa (−$12,500). The adjusted price is $268,000 + $3,500 − $12,500 = $259,000.
Why the Other Options Are Wrong
Option B: $277,000
Option B, $277,000, is wrong because it reverses both signs: $268,000 − $3,500 + $12,500 = $277,000. The correct calculation adds the garage and subtracts the pool: $268,000 + $3,500 − $12,500 = $259,000.
Option C: $252,000
Option C, $252,000, is wrong because it subtracts the garage adjustment: $268,000 − $3,500 − $12,500 = $252,000. The comparable has one fewer garage space, so the $3,500 is added, giving $259,000.
Option D: $284,000
Option D, $284,000, is wrong because it adds the pool adjustment: $268,000 + $3,500 + $12,500 = $284,000. The comparable has a pool/spa the subject lacks, so the $12,500 is subtracted, giving $259,000.
CBS: Comp Better, Subtract
If the Comp is Better, Subtract; if the comp is worse, add.
How to use: Use this to set the sign of each line in a sales grid.
Exam Tip
Compare the comparable to the subject line by line and decide each sign before adding up the adjustments.
Common Mistakes to Avoid
- -Adjusting the subject instead of the comparable
- -Reversing the sign for a feature the comparable has but the subject lacks
- -Adjusting for the full garage count instead of the one-space difference
Concept Deep Dive
Analysis
This question tests adjustment direction in a sales grid. The comparable has one fewer garage space than the subject, so it is inferior there and adjusts up; it has a pool/spa the subject lacks, so it is superior there and adjusts down. Getting each sign right is the key step.
Background Knowledge
Adjustments are made to the comparable's sale price to show what it would have sold for if it had the subject's features. A comparable that is better than the subject is adjusted down, and one that is worse is adjusted up.
Real-World Application
An appraiser's subject has a three-car garage and no pool, while her best comparable has a two-car garage and a pool. She adds the supported garage adjustment and subtracts the supported pool contribution in the grid.
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 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?
A comparable went under contract two weeks before the effective date. What does Fannie Mae expect about a time adjustment?
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