A comparable property sold for $400,000. In the sales comparison grid, it is adjusted downward 5% for financing terms, and upward 10% for conditions of sale. What is the net adjusted sale price?

• A. $418,000
• B. $380,000
• C. $420,000
• D. $362,000

Answer: (A)

In the sales comparison approach, you adjust the sale price of the comparable to reflect differences between the subject and the comparable. Here, you first apply a downward adjustment of 5% for financing terms, because the financing terms on the comparable are more favorable (or the subject would require less favorable terms). So you reduce the $400,000 price by 5%: 400,000 × 0.95 = 380,000. Then you apply an upward adjustment of 10% for conditions of sale, reflecting the subject's conditions being less favorable or requiring more favorable terms to mirror the subject. Increase 380,000 by 10%: 380,000 × 1.10 = 418,000. The net adjusted sale price is $418,000. Since multiplying the adjustments is commutative, the order doesn’t change the result: 400,000 × 0.95 × 1.10 = 418,000.