Property A is a four-unit apartment building with a four-car garage, which sold for $225,000. Property B is a similar four-unit apartment building with no garage, which sold for $205,000. What is the indicated adjustment for a four-car garage?

Property A is a four-unit apartment building with a four-car garage, which sold for $225,000. Property B is a similar four-unit apartment building with no garage, which sold for $205,000. What is the indicated adjustment for a four-car garage?

• A. $40,000
• B. $20,000
• C. $10,000
• D. $0

Answer: (B)

In the sales comparison approach, you adjust the sale price of the comparable to reflect differences in features between it and the subject. The value of a feature is inferred from how much price changes when that feature is present versus absent. Here, the only difference between the two four-unit buildings is the four-car garage. The property with the garage sold for 225,000, while the one without sold for 205,000. The market shows a 20,000 difference attributable to having the four-car garage. Since the subject has the garage, you adjust the comparable upward by 20,000 to reflect that feature. So the indicated adjustment for a four-car garage is 20,000.

In the sales comparison approach, you adjust the sale price of the comparable to reflect differences in features between it and the subject. The value of a feature is inferred from how much price changes when that feature is present versus absent.

Here, the only difference between the two four-unit buildings is the four-car garage. The property with the garage sold for 225,000, while the one without sold for 205,000. The market shows a 20,000 difference attributable to having the four-car garage. Since the subject has the garage, you adjust the comparable upward by 20,000 to reflect that feature. So the indicated adjustment for a four-car garage is 20,000.