Within the sales comparison approach, Sale A has adjustments of +$38,000 and -$34,000 (net +$4,000, gross $72,000). Sale B has adjustments of +$9,000 and +$6,000 (net +$15,000, gross $15,000). Both sold for about $400,000 and are equally well verified. Which sale should generally receive more weight?
Correct Answer
C) Sale B, because its gross adjustment of $15,000 shows closer comparability
Comparability is shown by how much a sale differs from the subject in total, which gross adjustments measure; Sale B's $15,000 gross is far smaller than Sale A's $72,000, so Sale B is closer in comparability and deserves more weight. Sale A's small net figure hides large offsetting differences, more adjustment work is not a reason for weight, and similar prices and equal verification do not make the two sales equally comparable.
Why This Is the Correct Answer
Option C is correct because Sale B's adjustments total only $15,000 gross, against $72,000 for Sale A, so Sale B is the more similar property. With equal verification, the sale closest in comparability should get the greater weight.
Why the Other Options Are Wrong
Option A: Sale A, because its net adjustment of $4,000 is the smaller of the two
Option A favors Sale A for its $4,000 net adjustment. Net adjustments let large plus and minus differences offset each other, so Sale A's $72,000 gross adjustment shows it is the less comparable sale.
Option B: Sale A, because its large offsetting adjustments show more thorough analysis
Option B treats Sale A's large offsetting adjustments as a sign of thorough analysis. Large adjustments each carry estimation risk, so they make the indication less reliable, not more.
Option D: Both equally, because each sold for about $400,000 and is equally verified
Option D weights the two sales equally because they sold for about the same price and are equally verified. Similar prices and verification do not make them equally comparable: Sale A needed $72,000 of gross adjustment against Sale B's $15,000, so Sale B is the closer substitute and deserves more weight.
Gross shows the gap
Net can cancel out; gross adds up every difference. Weight the sale whose gross adjustment is smallest, other things equal.
How to use: Use this when a question contrasts a small-net, large-gross sale with a sale that has small adjustments throughout.
Exam Tip
When net and gross point to different sales, trust gross as the comparability signal.
Common Mistakes to Avoid
- -Judging comparability by net rather than gross adjustment
- -Treating large offsetting adjustments as a strength
- -Weighting sales equally because their prices and verification are similar
Concept Deep Dive
Analysis
This tests the difference between net and gross adjustments when weighting comparables. A small net adjustment can hide large differences that cancel out, and each large adjustment adds uncertainty. Gross adjustment is the better measure of overall comparability.
Background Knowledge
Each adjusted sale produces its own indication, and these should not simply be averaged; the greatest weight goes to the sales closest in comparability. Gross adjustment, the sum of all adjustments regardless of sign, is a common measure of how different a sale is from the subject.
Real-World Application
An appraiser has one sale with a large view premium offset by a large condition deduction and another that differs only slightly in size and age. The second sale gets more weight because it needed far less adjustment overall.
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