Humber/Ontario Real Estate Course 3 Exam Practice

Salesperson Cyr uses a direct comparison approach to adjust the price of a comparable property with a garage valued at $30,000. The subject property has a finished recreation room valued at $20,000. What is the total adjustment?

1. Minus adjustment of $10,000 to the comparable

2. Minus adjustment of $50,000 to the comparable

3. No adjustment required

4. Plus adjustment of $10,000 to the subject property

5. Plus adjustment of $10,000 to the comparable

6. Plus adjustment of $20,000 to the subject property

The correct answer is: Minus adjustment of $10,000 to the comparable

The total adjustment in this scenario is a minus adjustment of $10,000 to the comparable property. This stems from identifying the value difference between the two properties based on their features. In this case, Cyr recognizes that the comparable property has a garage valued at $30,000, while the subject property includes a finished recreation room valued at $20,000. Since the garage is a higher value feature compared to the finished recreation room, a downward adjustment is necessary for the comparable property to account for the superior value of the garage. The adjustment calculation would be based on the difference in value between the garage and the finished recreation room, which is $30,000 (garage) - $20,000 (finished recreation room) = $10,000. Therefore, to reflect the actual market value difference accurately, Cyr would adjust the comparable property price downwards by $10,000, making it a minus adjustment. Thus, the correct response clearly demonstrates that the value of the comparison is being accurately aligned to reflect the true worth of the subject property in relation to its comparable features.