Comparable Sale 2 closed at $390,000 with the seller paying $10,000 of the buyer’s closing costs. Market analysis indicates that this concession inflated the comparable’s effective price by only $6,000. How should the appraiser adjust the comparable for concessions?
Correct Answer
B) Subtract $6,000 because the supported market reaction was a $6,000 price effect
Concession adjustments should reflect the market’s reaction to the concession, not mechanically mirror the concession amount. If the market evidence shows the $10,000 concession increased the effective sale price by only $6,000, the comparable should be adjusted downward by $6,000.
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Market data show home prices in a neighborhood have been increasing by 0.5% per month. A comparable went under contract 6 months before the effective date of the appraisal and closed for $360,000. Ignoring all other differences, what is the comparable’s time-adjusted indication as of the appraisal date?