An adjustment of +$10,000 is made to a comparable because the comparable has one fewer bathroom than the subject. This means the appraiser believes the extra bathroom contributes approximately $10,000 in value. This type of analysis is:
Why Market-based adjustment using paired sales or market evidence Is Correct
Answer A: Market-based adjustment using paired sales or market evidence
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
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Key Terms to Know
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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