A real estate agent is preparing a CMA for a 2,000 square foot bungalow. A comparable property sold for $450,000 but has an additional 300 square feet. If the adjustment is $150 per square foot, what is the adjusted sale price of the comparable?
Correct Answer
D) $405,000
The comparable property has 300 additional square feet, so we subtract the value of that extra space: $450,000 - (300 × $150) = $450,000 - $45,000 = $405,000. We adjust downward because the comparable is larger than the subject property.
Why This Is the Correct Answer
Option D ($405,000) is correct because we must adjust the comparable downward since it has more square footage than the subject property. The calculation is: $450,000 - (300 sq ft × $150/sq ft) = $450,000 - $45,000 = $405,000. This follows the fundamental CMA principle that adjustments are made TO the comparable to reflect what it would have sold for if it were similar to the subject property. Since the comparable is larger, buyers would pay less for the smaller subject property, requiring a downward adjustment.
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