In the California real estate market, an agent is explaining the sales comparison approach to a seller. The agent states that adjustments are always made to the comparable properties, not to the subject property. Why is this the standard practice in California?
Correct Answer
D) Because the subject property's value is unknown and the comparable's sale price is a known figure that can be adjusted
In the sales comparison approach, the comparable properties have known, verified sale prices, while the subject's value is what is being estimated. Adjustments are made to the comparable's sale price to determine what that comparable WOULD have sold for if it were identical to the subject. This is standard appraisal practice in California and nationwide under USPAP.
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A California real estate licensee is preparing a CMA and notices that one comparable property sold in a foreclosure auction conducted by a trustee under a deed of trust. How should this sale be handled in the CMA?
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A property in Alameda County, California sold and the county documentary transfer tax was $825. Alameda County charges $1.10 per $1,000 of the sale price. The City of Oakland charges an additional city transfer tax of $15.00 per $1,000 for properties over $300,000. If only the county transfer tax of $825 was recorded, what was the sale price?