An appraiser in Riverside County, California is making paired sales analysis to extract the value of a swimming pool. Property A (with pool) sold for $625,000. Property B (no pool, otherwise identical) sold for $590,000. Property C (with pool) sold for $710,000. Property D (no pool, otherwise identical to C) sold for $678,000. The documentary transfer tax in Riverside County is $1.10 per $1,000 of the sale price. What is the average market-derived adjustment for a swimming pool based on these paired sales?
Correct Answer
C) $33,500
Step 1: Paired sale 1 — Pool value = $625,000 - $590,000 = $35,000. Step 2: Paired sale 2 — Pool value = $710,000 - $678,000 = $32,000. Step 3: Average pool value = ($35,000 + $32,000) / 2 = $33,500. The documentary transfer tax information is included as a distractor — it confirms sale prices but does not change the paired sales calculation.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Property Valuation Financial Analysis Question
Background Knowledge for Property Valuation Financial Analysis
Real World Application in Property Valuation Financial Analysis
Common Mistakes to Avoid on Property Valuation Financial Analysis Questions
Related Topics & Key Terms
Key Terms:
Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
More Property Valuation Financial Analysis Questions
Return of an investor’s investment is provided for through:
A licensed appraiser in California is appraising a home in a subdivision where half the homes are within a Mello-Roos Community Facilities District and half are not. The subject property is within the Mello-Roos district and pays $3,200 annually in special taxes. When selecting comparables, which approach is MOST appropriate under California appraisal standards?
A California real estate agent explains to an investor that the Gross Rent Multiplier (GRM) is a simplified method of property valuation. Compared to the capitalization rate method, what is the main limitation of the GRM approach in the California market?
When conducting a sales comparison analysis in California, an appraiser discovers that the subject property has an Accessory Dwelling Unit (ADU) that was built under California's recent ADU legislation. How should the appraiser handle this feature?
The appraisal approach that estimates value by comparing a property to similar recently sold properties is the:
- → The period of time a structure continues to earn sufficient income to continue operations is referred to as the structure’s:
- → A California real estate agent is selecting comparable sales for a CMA on a property in Fresno. The agent finds a sale from 14 months ago in the same neighborhood. Under standard California CMA practice, why might the agent hesitate to use this comparable?
- → An appraiser in California is using the cost approach for a property in Sacramento and must account for entrepreneurial profit (also called developer's profit). A local developer confirms that typical profit margins in the Sacramento market are 15-20% of total development costs. How should the appraiser handle entrepreneurial profit?
- → An appraiser views the addition of an amenity to an apartment building under which appraisal principle?
- → Which of the four factors of value (DUST) does zoning law most directly affect?
- → An important characteristic of land is that it may be modified or improved. Such improvements tend to increase the value of real estate. Which of the following is NOT an improvement?
- → A property is located in both a CAL FIRE-designated State Responsibility Area and a Very High Fire Hazard Severity Zone. Which of the following BEST describes how these designations affect property value?
- → A California buyer's agent is reviewing comparable sales data and notices that the county recorder's office lists different documentary transfer tax amounts for similar properties in the same city. Some properties show both a county and city transfer tax, while others show only the county tax. What does this difference indicate about the sale verification process?
- → When calculating Net Operating Income (NOI) for the income approach in California, all of the following are deducted as operating expenses EXCEPT:
- → A married couple in California divorces, and one spouse receives the family home as part of the divorce settlement. Under Proposition 13, what happens to the property's assessed value?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Related Articles
Property Flyer Generator — 2026 Guide for U.S. Agents: Step-by-Step + Best Practices
Learn how Property Flyer Generator works and how U.S. real estate agents use it in 2026. Includes setup steps, practical examples, and best-practice tips.
Real Estate Exam Property Ownership & Title (2026): Deeds, Liens, Encumbrances + Practice Questions
Understand deeds, liens, encumbrances, and ownership types with exam-style practice questions and traps.
Property Landing Page — 2026 U.S. Agent Guide: Setup, Use Cases & Pro Tips
Learn how Property Landing Page works and how U.S. real estate agents use it in 2026. Includes setup steps, practical examples, and best-practice tips.
Previous Question
A California listing agent is preparing a CMA for a home in a neighborhood where Proposition 13 has resulted in wide variations in property tax bills among similar homes. A buyer asks whether the property tax shown on the listing will be their tax after purchase. What should the agent explain?
Next Question
A buyer's agent in California is reviewing a CMA prepared by the listing agent. One of the comparable sales was a transaction between a parent and child at below-market price. Under California appraisal and CMA standards, how should this sale be treated?