Humber/Ontario Real Estate Course 3 Exam Practice

What percentage adjustment should be made on a comparable property sold for $323,600 four months ago, given a 0.6% monthly average price increase over the past six months?

1. Plus adjustment of 3.2%

2. Plus adjustment of 2.4%

3. Minus adjustment of 0.16%

4. Minus adjustment of 4.8%

5. Plus adjustment of 1.8%

6. No adjustment is needed

The correct answer is: Plus adjustment of 2.4%

To determine the correct percentage adjustment for the comparable property sold for $323,600 four months ago, we first need to calculate the total price increase based on the given average monthly price increase of 0.6%. Since the property sold four months ago, we take the monthly increase of 0.6% and multiply it by four months to find the total price increase over that period: 0.6% per month × 4 months = 2.4% total increase. This means that the price of similar properties today would be expected to be around 2.4% higher than the price at which the comparable property was sold. Therefore, a plus adjustment of 2.4% should be applied to account for the increase in value over the last four months, reflecting the current market conditions. In the context of the other choices, making a plus adjustment of 2.4% correctly reflects the appreciation of the property's value due to the steady increase observed in the market. Other options either suggest inappropriate adjustments based on different scenarios or imply no change, which does not accurately represent the described market trend.