National Real Estate Exam (PSI)Valuation and Market AnalysisEasy
A real estate agent is preparing a Comparative Market Analysis (CMA) for a seller. They have identified three comparable properties that recently sold. Which of the following factors is generally adjusted LAST when comparing properties in a CMA?
- ANumber of bedrooms and bathrooms
- BLot size and view
- CDate of sale (market conditions)
- DSquare footage of living space
Show answer & explanationAnswer & explanation
Correct answer: C. Date of sale (market conditions)
In a CMA, adjustments are typically made in a specific order. Market conditions, reflected by the date of sale, are usually the last adjustment because they account for changes in the overall market since the comparable property sold.
Why the other options are wrong
- A. Physical features like bedrooms and bathrooms are adjusted early in the CMA process.
- B. Site characteristics such as lot size and view are adjusted after physical features but before market conditions.
- D. Square footage is a significant physical feature and is adjusted early in the CMA process.
CMA Adjustment Order
The systematic sequence in which adjustments are applied to comparable properties in a Comparative Market Analysis to derive an estimated value for the subject property.
- Adjustments account for differences between subject and comparables.
- Typically adjusted in a specific order: Transactional, Property, Market.
- Date of sale (market conditions) is usually the last adjustment.
Memory trick: Think 'TOP' for Transactional, Property, Market adjustments.