Sales Comparison Approach Flashcards
7 cards from real CGA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Sales Comparison Approach flashcards as text
When an appraiser makes a paired sales analysis, the primary purpose is to:
Answer: Isolate and quantify the contribution of a single property feature
Paired sales analysis isolates a single variable by comparing two sales that are identical in all respects except the feature being measured.
A comparable sale closed 18 months ago and market prices have risen 6% annually. The appropriate time adjustment to the comparable's sale price is:
Answer: +9%
An 18-month (1.5-year) appreciation at 6% per year requires a +9% upward adjustment to bring the older comparable to current market conditions.
The term 'transactional adjustment' in the sales comparison approach refers to adjustments for:
Answer: Conditions of sale, financing terms, and market conditions
Transactional adjustments address non-physical factors affecting price, including atypical financing, motivation, and changes in market conditions over time.
Which condition would most likely require a downward adjustment to a comparable sale's price?
Answer: The comparable is in a superior location to the subject
A comparable in a superior location sold for more than the subject would; a downward adjustment brings its price to the subject's value level.
In the sales comparison approach, 'arm's-length transaction' means:
Answer: Both parties act in their own best interest with no undue pressure
An arm's-length transaction involves independent, knowledgeable parties acting in their own self-interest without undue pressure, making it suitable as a market indicator.
An appraiser is analyzing a comparable that sold with seller-paid points that lowered the buyer's interest rate. This requires a:
Answer: Financing concession adjustment
Seller-paid points are a financing concession that inflates the nominal sale price; a downward adjustment is required to reflect the cash-equivalent price.
The 'gross adjustment percentage' on a comparable sale is calculated by:
Answer: Adding the absolute values of all adjustments and dividing by the sale price
Gross adjustment is the sum of the absolute values (ignoring signs) of all adjustments divided by the unadjusted sale price, measuring total adjustment magnitude.