California Real Estate SalespersonProperty Valuation and Financial AnalysisMedium
An appraiser is comparing a subject property to Comparable A, which sold for $480,000. Comparable A has a superior view, which the appraiser values at $15,000. The subject property has a larger lot size, valued at $10,000 more than Comparable A's lot. What is the adjusted sales price of Comparable A?
- A$485,000
- B$495,000
- C$475,000
- D$505,000
Show answer & explanationAnswer & explanation
Correct answer: C. $475,000
When adjusting comparables, if the comparable is superior to the subject, you subtract the value of the superior feature. If the comparable is inferior, you add. Here, Comparable A has a superior view (subtract $15,000), and the subject has a superior lot (so Comparable A's lot is inferior, add $10,000). $480,000 - $15,000 + $10,000 = $475,000.
Why the other options are wrong
- A. Incorrect, likely from adding both adjustments or incorrectly subtracting the lot size difference.
- B. Incorrect, likely from adding both adjustments.
- D. Incorrect, likely from subtracting the lot size difference and adding the view.
Sales Comparison Approach Adjustments
Modifications made to the sales prices of comparable properties to account for differences between them and the subject property.
- Adjust the comparable, not the subject
- If comparable is superior, subtract (CBS - Comparable Better Subtract)
- If comparable is inferior, add (CIA - Comparable Inferior Add)
Memory trick: CBS to CIA: Compare, Subtract, Add