Humber/Ontario Real Estate Course 3 Exam Practice

What adjustment would an appraiser make if the comparable property has a recreation room valued at $23,500 and the subject property does not have one?

1. Minus adjustment of $23,500 to the comparable property

2. Minus adjustment of $8,300 to the comparable property

3. Minus adjustment of $23,500 to the subject property

4. Plus adjustment of $31,800 to the comparable property

5. Plus adjustment of $23,500 to the subject property

6. Minus adjustment of $31,800 to the comparable property

The correct answer is: Minus adjustment of $23,500 to the comparable property

An appraiser aims to compare properties accurately by making adjustments based on features that may affect the value. In this scenario, the comparable property has a recreation room valued at $23,500, while the subject property does not. To create a fair comparison, the appraiser would need to account for the value of the recreation room in the comparable property. Since the subject property lacks this feature, an adjustment is required. Specifically, the appraiser would make a negative adjustment to the value of the comparable property, effectively reducing its value by the amount attributed to the recreation room. This is because the comparable should be seen as less valuable without that feature when assessing its worth against the subject property. Thus, the logical adjustment is to subtract $23,500 from the value of the comparable property to reflect the absence of the recreation room in the subject property. This ensures that both properties are on a level playing field for the purposes of valuation, allowing for an accurate and fair market comparison.