If the subject property is newer than the comparable, how should you adjust the comparable's price?

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Study for the Washington Real Estate Fundamentals Rockwell Exam. Utilize flashcards, multiple choice questions with hints and explanations. Prepare thoroughly for your real estate career!

Multiple Choice

If the subject property is newer than the comparable, how should you adjust the comparable's price?

Explanation:
Adjustments for physical differences in the sales comparison approach. When the subject property is newer than a comparable, the subject has a higher value due to its newer age. To make a fair apples-to-apples comparison, you increase the price of the older comparable by the amount that market data indicates is attributable to the newer age. In other words, you adjust the comparable upward to reflect the subject’s newer status. If the subject were older, you’d adjust the comparable downward. No adjustment would ignore this known difference, and a double adjustment would overstate the difference.

Adjustments for physical differences in the sales comparison approach. When the subject property is newer than a comparable, the subject has a higher value due to its newer age. To make a fair apples-to-apples comparison, you increase the price of the older comparable by the amount that market data indicates is attributable to the newer age. In other words, you adjust the comparable upward to reflect the subject’s newer status. If the subject were older, you’d adjust the comparable downward. No adjustment would ignore this known difference, and a double adjustment would overstate the difference.

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