In a declining market, which adjustment technique should be applied when using comparable sales from 8 months ago?
Correct Answer
C) Decrease the comparable's sale price for time adjustment
In a declining market, property values are decreasing over time, so a comparable sale from 8 months ago would have sold at a higher price than current market conditions warrant. Therefore, the sale price must be adjusted downward to reflect the current lower market values.
Why This Is the Correct Answer
Option C is correct because in a declining market, property values decrease over time. A comparable sale from 8 months ago occurred when market values were higher than today. To make this comparable relevant to current market conditions, the sale price must be adjusted downward to reflect the decline in values that has occurred since the sale. This downward adjustment ensures the comparable accurately represents current market value, which is essential for proper valuation under TRESA's professional competence requirements.
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A buyer relocating from Toronto is budgeting for closing costs on an Alberta home and asks about land transfer tax. Which statement is correct for an Alberta purchase?