Questions to Expect in the Sales Module

1.       An appraiser is appraising a recently completed 60 lot residential subdivision. One of the comparable properties is a 30 lot subdivision which sold out in 2 years. What is the % adjustment for size to be applied to the comparable property given the following?
Absorption of subject is 4 years
Use semi-annual accounting and 12% annual discount rate

A.       Upward ~ 12%
B.       Downward ~ 12% (correct answer)
C.       Upward ~22%
D.       Downward ~22%
2.       An appraiser is trying to develop a market conditions adjustment for a current appraisal of a parcel of land. Market conditions have been very weak in the last few years. There have been no sales since 5 years ago when the market was last at equilibrium. Three sales with the same HBU and development potential transpired 5 years ago at a reconciled price of $100/SF. The appraiser’s market study indicates that such development use will not be financially feasible for 3 years. An appropriate discount rate is 10%. What is the market conditions adjustment per year on a SL basis?

A.        -9%
B.        -8%
C.        -5% (correct answer)
D.        Cannot be determined because there have been no sales in the last 5 years.
3.       What is the annualized Straight Line change in value given the following:

Sale 1: $!5/SF  3 months ago
Sale 2: $13/SF 6 months ago
Sale 3: $12/SF 12 months ago
Sale 4 : $11/SF 14 months ago
Sale 5: $10/SF 15 months ago
See also if you can forecast the value in 5 months.  Answer is $17.52.
A.       25%
B.       32%
C.       37%
D.       41% (correct answer)

Topics Covered in the Sales Module

Transaction vs. property adjustments

Order of adjustments

$ vs. % adjustments

qualitative vs. quantitative adjustments

selecting the best unit of comparison using statistical analysis

property rights adjustment

rent up adjustment

regression analysis

adjusting for occupancy differences

selecting the best comps

value when complete vs. when stable

cash equivalency adjustment