Within the sales comparison approach, Sale X needs one market-supported adjustment of $46,000 for gross living area, about 11% of its $418,000 sale price. Sale Y needs three market-supported adjustments for garage, porch and a half bath that total $12,600 in absolute terms, about 3% of its $420,000 sale price. Which sale deserves more weight?
Correct Answer
A) Sale Y, because its absolute gross adjustment is the smaller share of its sale price.
The number of adjustments is a rough rule of thumb, but the absolute gross adjustment as a percentage of sale price is described as perhaps the better indicator of comparability. Sale Y's adjustments total about 3% of price against about 11% for Sale X, so Sale Y differs less from the subject and deserves more weight. Market support for both sales does not make them equally comparable.
Why This Is the Correct Answer
Option A is correct because Sale Y's absolute gross adjustment is about 3% of its price ($12,600 / $420,000), while Sale X's is about 11% ($46,000 / $418,000). The smaller total difference from the subject makes Sale Y the more comparable sale, so it deserves more weight.
Why the Other Options Are Wrong
Option B: Sale X, because it requires fewer adjustments and so offers fewer chances for error.
Option B favors Sale X because it requires fewer adjustments. The count is a rough rule of thumb, but one large adjustment can reflect a bigger difference from the subject than several small ones, as the 11% versus 3% comparison shows here.
Option C: Sale X, because one living-area adjustment is easier to support than three amenity adjustments.
Option C favors Sale X because one living-area adjustment is supposedly easier to support than three amenity adjustments. The stem states that all the adjustments are market-supported, so support does not separate the sales; the size of the differences does.
Option D: Equal weight, because the adjustments for both sales are supported by market data.
Option D gives equal weight because both sales have market-supported adjustments. Support makes each adjustment credible, but Sale X still differs from the subject far more than Sale Y.
Size beats count
Count the dollars, not the rows. A single large adjustment can mean a sale is less like the subject than several small ones.
How to use: Use this when one sale has fewer adjustments but a larger total, and another has more adjustments but a smaller total.
Exam Tip
Compute each sale's absolute gross adjustment as a percentage of its sale price; the smaller percentage usually points to the more comparable sale.
Common Mistakes to Avoid
- -Weighting sales by the number of adjustments alone
- -Using net rather than absolute gross adjustment to judge comparability
- -Assuming market support makes all sales equally comparable
Concept Deep Dive
Analysis
The question sets two guides to comparability against each other: the count of adjustments and the size of the absolute gross adjustment. Sale X has fewer adjustments but a much larger total difference from the subject. The better guide, absolute gross adjustment as a share of price, favors Sale Y.
Background Knowledge
In reconciling adjusted sale prices, more weight goes to the sales most comparable to the subject. Two guides are the number of adjustments and the absolute gross adjustment, which adds all adjustments without regard to sign. Expressed as a percentage of sale price, the absolute gross adjustment allows sales to be compared directly.
Real-World Application
An appraiser has one comparable that is much larger than the subject and needs a big living-area adjustment, and another that is nearly identical in size but lacks a garage, porch and half bath. Comparing absolute gross adjustments as a share of price, the appraiser places more reliance on the second sale.
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