A subject property has a pool, but the comparable property does not. If the pool is valued at $3,000, what adjustments should be made?
a. Add $3,000 to the subject
b. Subtract $3,000 from the subject
c. Add $3,000 to the comparable
d. Subtract $3,000 from the comparable
With the comparable sales approach, we are basically asking, “What do we need to do to make the comparable exactly like the subject?” If the subject property has a pool and the comparable does not have a pool, how do we adjust the comparable to make it just like the subject? We add a pool.
It is very easy to get this one mixed up if you try to do it without the formula. If you focus on the formula, you will get it right. The formula is: CBS-CIA. If the Comparable is Better, you Subtract. If the Comparable is Inferior, you Add. Never, never, never, never adjust the subject.
So if you saw the above question on the Florida real estate exam, you would know before you even read the question that A and B are wrong. That narrows it down to C or D. Since the comparable is inferior, we will add.
Focus on the formula, and you shouldn’t have any problems with this question.
Please note that neither I, nor anyone in the Climer family, have any affiliation with Climer School of Real Estate. My father, Ron Climer, sold Climer School of Real Estate in 2014. You can find me at Demetree School of Real Estate.