A California agent is verifying a comparable sale price using public records. The documentary transfer tax paid was $1,045. Los Angeles County charges $1.10 per $1,000 of the sale price, and the City of Los Angeles charges an additional $4.50 per $1,000. What was the sale price of the comparable property?
Correct Answer
C) $186,607
When a property is located within the City of Los Angeles, both the county and city documentary transfer tax rates apply and must be combined. Step 1: Combined rate = $1.10 + $4.50 = $5.60 per $1,000. Step 2: Sale price = (Tax paid ÷ Rate per $1,000) × $1,000 = ($1,045 ÷ $5.60) × $1,000 = $186,607.14, rounded to $186,607. This is the correct approach when a city imposes its own transfer tax in addition to the county rate.
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Previous 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?
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An appraiser using the sales comparison approach in California considers multiple factors when selecting and adjusting comparable sales. All of the following are valid reasons to adjust a comparable sale price in the California market EXCEPT: