Why is a market-conditions adjustment applied from the comparable's contract date rather than its closing date?
Correct Answer
B) The price was struck at contract; closing just executes it
Why this is correct: The market price is agreed upon when the contract is signed, reflecting market conditions at that date. The closing date is merely the administrative fulfillment of that contract. Adjusting from the contract date correctly aligns the adjustment with the market event. Why the other choices are wrong: Closing dates are often public record. Using contract dates does not inherently make the adjustment larger; it makes it accurate. There is no uniform sixty-day offset requirement. Exam tip: Always apply market-conditions adjustments from the contract date, not the closing date.
Why This Is the Correct Answer
Why this is correct: The market price is agreed upon when the contract is signed, reflecting market conditions at that date. The closing date is merely the administrative fulfillment of that contract. Adjusting from the contract date correctly aligns the adjustment with the market event. Why the other choices are wrong: Closing dates are often public record. Using contract dates does not inherently make the adjustment larger; it makes it accurate. There is no uniform sixty-day offset requirement. Exam tip: Always apply market-conditions adjustments from the contract date, not the closing date.
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