RPA Sales Comparison Approach

Question 1

What is the primary principle underlying the sales comparison approach to value?

Accepted Answer

The principle of substitution

Answer

The principle of anticipation

Answer

The principle of contribution

Answer

The principle of conformity

Question 2

When making adjustments in the sales comparison approach, adjustments are made to which property?

Accepted Answer

The comparable sale

Answer

The subject property

Answer

Both the subject and comparable

Answer

The property with the lower value

Question 3

What does a negative (downward) adjustment to a comparable sale indicate?

Accepted Answer

The comparable is superior to the subject in that feature

Answer

The comparable is inferior to the subject in that feature

Answer

The comparable sold for less than market value

Answer

The market has declined since the comparable sold

Question 4

What is a 'paired sales analysis' used for in the sales comparison approach?

Accepted Answer

To isolate and quantify the value contribution of a single property feature

Answer

To estimate the value of two properties simultaneously

Answer

To verify that two sales occurred at arm's length

Answer

To compare two appraisers' value conclusions

Question 5

What does a 'time adjustment' (market conditions adjustment) account for in the sales comparison approach?

Accepted Answer

Changes in market conditions between the comparable's sale date and the effective date of appraisal

Answer

The age difference between the subject and comparable

Answer

The time it took to sell the comparable property

Answer

Seasonal fluctuations in rental income

Question 6

In the sales comparison approach, which of the following is considered a 'transactional adjustment'?

Accepted Answer

Adjusting for seller concessions or financing terms

Answer

Adjusting for gross living area differences

Answer

Adjusting for the number of bedrooms

Answer

Adjusting for lot size differences

Question 7

Which criterion is MOST important when selecting comparable sales for the sales comparison approach?

Accepted Answer

The comparable must be competitive with the subject in the eyes of typical buyers

Answer

The comparable must have sold within the past six months

Answer

The comparable must be in the same subdivision as the subject

Answer

The comparable must have the same square footage as the subject