CGA Sales Comparison Approach 2

Question 1

When an appraiser makes a paired sales analysis, the primary purpose is to:

Accepted Answer

Isolate and quantify the contribution of a single property feature

Answer

Paired sales analysis isolates a single variable by comparing two sales that are identical in all respects except the feature being measured.

Question 2

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:

Accepted Answer

+9%

Answer

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.

Question 3

The term 'transactional adjustment' in the sales comparison approach refers to adjustments for:

Accepted Answer

Conditions of sale, financing terms, and market conditions

Answer

Transactional adjustments address non-physical factors affecting price, including atypical financing, motivation, and changes in market conditions over time.

Question 4

Which condition would most likely require a downward adjustment to a comparable sale's price?

Accepted Answer

The comparable is in a superior location to the subject

Answer

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.

Question 5

In the sales comparison approach, 'arm's-length transaction' means:

Accepted Answer

Both parties act in their own best interest with no undue pressure

Answer

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.

(CGA) Certified General Appraiser Practice Test

(CGA) Certified General Appraiser Practice Test

CGA Sales Comparison Approach 2