A comparable property sold for $80,000. In the sales comparison grid, it was adjusted downward 10% for financing terms and 10% for market conditions. What is the dollar adjustment for financing terms?

• A. -$8,000
• B. $8,000
• C. $10,000
• D. $0

Answer: (B)

In the sales comparison approach, you turn percentage adjustments into dollar amounts by applying the percentage to the sale price of the comparable. For financing terms, a downward adjustment of 10% means you calculate 10% of the comparable’s price to know how much to adjust.

Ten percent of 80,000 is 8,000. Since the adjustment is downward, this represents a deduction of 8,000 from the comparable’s price to reflect less favorable financing terms for the subject. So the dollar adjustment for financing terms is 8,000. (If you later apply the other downward 10% for market conditions as well, you’d subtract another 8,000, giving an adjusted price of 64,000 from the original 80,000.)