In the Question Set entitled "Residential Sales and Income Approaches, Final Exam #1.

 

Question #24 reads:

 

If the subject property is 10% superior to the comparable property due to location, and 15% inferior due to quality, what adjustment is made to the comparable?

 

a.  -5%

b.  -15%

c.  +5%

d.  +15%

 

The answer key says the correct answer is "a" or -5%.  I appears that the author merely added the percentages up to derive the answer.  This is, of course, incorrect.  To solve this problem you must do the following:

 

1.  Decide the order of adjustments.  In this case, location comes first and quality comes second (Remember the acronym PFCMLPI).

2.  Make each adjustment separately, calculating a subtotal for each calculation.

 

Here is the solution:

 

 

The answer is to make negative adjustments totaling 6.5%

 

Question 50 in the same question set is similarly wrong.  Question #36 in the second Sales Comparison Approach Exam is also wrong for the same reason.  I will supply the solutions of all these questions at a later time.

 

Modified:  9/7/2009

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