When an appraiser adjusts a comparable sale upward by $5,000 for a feature the subject has but the comparable lacks, the adjustment means:
Why The comparable's adjusted price is increased by $5,000 to make it more like the subject Is Correct
Answer B: The comparable's adjusted price is increased by $5,000 to make it more like the subject
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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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