Section 6, Unit 2: Using the Sales Comparison Approach
Jim, an appraiser, needs to make three adjustments to a comparable sales price. Which of these comes third in the sequence?
$20,000 for a superior view
Property B, a sales comparable, must be adjusted as follows: Property B has a $10,000 addition that the subject property doesn't have, and a market timing adjustment of 5%, because prices have risen 5% since Property B sold. If Property B's sales price were $100,000, what would its adjusted sales price be?
$95,000
How is the adjusted sales price calculated for a comparable property using the sales comparison approach?
By adding or subtracting the sum of the adjustments made on a comparable property
Which of the following is a date of sale/time difference that appraisers adjust for so that the comparable sales price can indicate the value of the subject property?
Comparable B sold six months ago before the market went into a recession.
To make valid computations of adjustments for the market comparison approach to value, elements of comparison must be applied in a specific order. Which of these elements has the highest priority?
Conditions of sale
How is the gross adjustment percentage calculated in the sales comparison approach?
Dividing the total dollar adjustment by the comparable's sale price.
What are the two types of adjustments an appraiser can make in the sales comparison approach?
Dollar adjustment and percentage adjustment
When adjusting for differences between the comparable and subject properties, which type of adjustments should an appraiser make last?
Dollar adjustments
When you're using the sales comparison approach to value a property, which of the following is considered a category of adjustment?
Financing terms and cash equivalency
For which of the following categories of adjustment are you most likely to see a dollar adjustment instead of a percentage adjustment?
For which of the following categories of adjustment are you most likely to see a dollar adjustment instead of a percentage adjustment?
Which of the following is a limitation of using the sales comparison approach to valuation?
It's sometimes difficult to know if a transaction was really arm's length.
When an appraiser is adjusting for differences in a sales comparison approach to value, why is a market timing adjusted before a feature, such as a formal dining room?
Market timing relates to the property, whereas features relate to one line item.
All of the following items are advantages of the sales comparison except for which one?
Needs arm's length transactions
Which one of the following items is NOT included in the sales comparison section underneath the grid on page two of the URAR?
Opinion of the site value
When adjusting for differences between the comparable and subject properties, which type of adjustments should an appraiser make first?
Percentage adjustments
Which of the approaches to value used by appraisers is most like that used by licensees when helping clients determine an appropriate list price?
Sales comparison
Appraiser April has a subject property with two bedrooms. If one of her comparables has three bedrooms, what type of adjustment should she make?
She should adjust the comparable property down.
If an appraiser needs to make an adjustment for time and an adjustment for the number of rooms, which of the following statements is true?
The appraiser should adjust for time and then adjust for the difference in the number of rooms.
When using the sales comparison approach to value, what might it mean if there's a large total adjustment needed for a comparable property?
The property may not be a reliable comparable for the subject property.
Under what circumstances might an appraiser use a 15% adjustment?
When housing prices have dropped by 15%