Exam 9: Analyzing and Adjusting Comparable Sales

Using "matched pairs" of comparable sales is considered an indirect method of estimating sales adjustments.

Units of comparison are dollar or percentage amounts that are added to, or subtracted from, the comparable sales prices.

The four elements of comparison used in the sales comparison approach include the terms and time of sale, as well as location and physical elements about the property.

Sales adjustments should be market-related.

A comparable sale should be adjusted for the terms of sale when the sale involves unique financing that offers an advantage to the buyer.

If the 1.800 square-foot houses in the subject neighborhood sell typically at $200 per square foot, you would expect that a 1.400 square-foot house would sell for under $200 per square foot.

Variable units of comparison can often be effectively analyzed by graphing the sales.

An example of an economic unit of comparison in the appraisal of land is the price per buildable apartment or dwelling unit.

To adjust the sales price of a comparable sale with a 10% better location, you should add 10% to the price.

Two or more percentage adjustments should theoretically be multiplied together (instead of added) when they are dependent upon each other.