Market evidence shows buyers use dwelling-unit or building-area comparisons for competitive duplex/triplex properties. What is appropriate?
Correct Answer
D) Use supported consistent units such as price per dwelling unit or matching building area.
A consistently applied market-supported unit can help compare duplexes/triplexes, but neither unit count nor area alone guarantees comparability. Bedroom-based measures may be useful where supported; the choice should follow actual market behavior rather than a universal prohibition.
Why This Is the Correct Answer
Option D is correct because the unit of comparison should generally reflect the one used by market participants. When buyers compare duplexes and triplexes by dwelling unit or building area, using those units consistently across the comparables reflects actual market behavior.
Why the Other Options Are Wrong
Option A: Compare the total prices of the properties while ignoring the differences in unit count and building size.
Option A compares total prices while ignoring differences in unit count and building size. For duplexes and triplexes those differences matter to buyers, so ignoring them distorts the comparison.
Option B: Use one building per lot as proof of identical utility.
Option B treats one building per lot as proof of identical utility. Having one building per lot says nothing about unit count, size or income potential, so it does not establish equal utility.
Option C: Average bedrooms without checking the supported market unit.
Option C averages bedrooms without checking the supported market unit. Bedroom measures can be useful where the market supports them, but using them without checking how buyers compare these properties is not supported.
Measure like the market
Use the yardstick buyers use, and use the same yardstick for every comparable.
How to use: Use this when choosing a unit of comparison for income-producing or multi-unit properties.
Exam Tip
Look for the choice that ties the unit of comparison to market behavior and consistent application.
Common Mistakes to Avoid
- -Comparing total prices of buildings with different unit counts
- -Choosing a unit of comparison the local market does not use
- -Mixing different units of comparison across comparables
Concept Deep Dive
Analysis
This question tests choosing a unit of comparison for small multifamily properties. The unit should reflect how market participants compare properties, here price per dwelling unit or building area. It must be applied consistently and supported by the market.
Background Knowledge
Units of comparison such as price per unit, per room or per square foot let appraisers compare properties of different sizes. The best unit is the one buyers and sellers in that market actually use. Applying it consistently across comparables keeps the analysis meaningful.
Real-World Application
Local investors price small rental buildings by price per door. The appraiser of a triplex analyzes duplex and fourplex sales on a price-per-unit basis, then considers differences in unit size and condition.
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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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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