Adjustments for one element have opposite signs across comparables. What should the appraiser assess?
Correct Answer
C) Whether each sign and size fits the difference and market support
Comparables may be superior or inferior to the subject for the same element, producing opposite signs. Evaluate each sign, magnitude and applicable market evidence. An identical per-unit rate is appropriate only when supported across those particular differences; nonlinear effects, different ranges or contexts may justify differing rates. Do not select cases merely by favorable adjustment direction.
Why This Is the Correct Answer
Option C is correct because adjustments are made toward the subject, so a comparable superior in an element gets a negative adjustment and an inferior one gets a positive adjustment. The appraiser should assess whether each sign and magnitude fits the actual difference and is supported by the market. A uniform rate is appropriate only when the evidence supports it across those differences.
Why the Other Options Are Wrong
Option A: Whether all downward-adjusted cases can be discarded
Option A asks whether all downward-adjusted cases can be discarded. Choosing comparables by the direction of their adjustments is selective and unsupported; a downward adjustment just means the comparable is superior in that element.
Option B: Whether all signed adjustments can be replaced by their mean
Option B asks whether all signed adjustments can be replaced by their mean. Averaging positive and negative adjustments would erase real differences between comparables and does not reflect each one's relationship to the subject.
Option D: Whether one identical dollar amount should replace each adjustment
Option D asks whether one identical dollar amount should replace each adjustment. Comparables can differ from the subject by different amounts and in different directions, so a single flat figure would misstate many of them unless the evidence supports it.
Signs follow the subject
Each comparable's sign comes from its own comparison with the subject, so mixed signs are expected when the subject falls in the middle.
How to use: Use this to recognize that opposite signs are normal and to focus on whether each one is supported.
Exam Tip
Avoid answers that simplify by discarding, averaging or flattening adjustments; the better answer checks each adjustment against the actual difference and market support.
Common Mistakes to Avoid
- -Treating mixed adjustment signs as an error
- -Discarding comparables because they need downward adjustments
- -Forcing one flat amount when the market shows nonlinear effects
Concept Deep Dive
Analysis
This question tests how to interpret adjustments with opposite signs for the same element. Opposite signs are normal when some comparables are superior and others inferior to the subject. The appraiser should check that each sign and amount fits the actual difference and is supported by market evidence, rather than forcing a single uniform figure.
Background Knowledge
The direction and sign of adjustments depend on whether the comparable is superior or inferior to the subject in each element. Mixed signs across comparables are common and can help bracket the subject's value. Adjustment amounts may also vary across ranges when market reactions are nonlinear.
Real-World Application
A subject has 2,000 square feet, with comparables of 1,800, 2,100 and 2,300 square feet. The size adjustments are positive for the smaller comparable and negative for the two larger ones. The appraiser confirms each amount reflects market-supported rates for those size ranges.
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?
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Previous Question
While researching a two-story home, an appraiser talks with the listing agent for an active listing of the same model two doors from the subject. The agent says the house is listed at $479,000 and that buyers in the subdivision 'will pay $475,000 or more' for this model. Four verified closed sales of the same model over the past four months sold between $448,000 and $456,000, and the market has been stable. How should the appraiser treat the agent's statements?
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