Property ValuationIntermediateArizona Exam

An Arizona appraiser finds a comparable sale has one extra bathroom compared to the subject property. The appraiser would:

AAdd the bathroom value to the subject property's estimated value
BSubtract the bathroom value from the comparable's sale priceCorrect
CAdd the bathroom value to the comparable's sale price
DMake no adjustment since bathrooms rarely affect value

Why Subtract the bathroom value from the comparable's sale price Is Correct

Answer B: Subtract the bathroom value from the comparable's sale price

When the comparable is superior to the subject (extra bathroom), the appraiser subtracts the adjustment from the comparable's sale price. The rule: comparable is better, adjust down; comparable is worse, adjust up.

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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