An appraiser valuing a complex mixed-use property uses three comparables and arrives at an indicated value. Which statement is true regarding this situation?

• A. The appraiser needs to ensure a sufficient number of comparable sales is used to produce credible results
• B. The appraiser should use only one comparable sale
• C. The appraiser should not adjust for any differences
• D. The appraiser must always adjust for time of sale only

Answer: (C)

When valuing a complex mixed-use property, you build your indication of value by comparing the subject to multiple sales and adjusting each comparison for differences in features, timing, and market conditions. The credibility of the result increases with the number of credible comparables used, because a broader sample helps average out unique, non-typical factors each sale may have.

Relying on a single comparable typically undermines credibility, since one sale may reflect unusual circumstances. While adjustments are essential, you don’t limit them to time of sale only; you adjust for many differences such as property type mix, land versus building, location, terms of sale, condition, financing, and other relevant factors. In short, you use a sufficient number of comparables and make appropriate adjustments so the comparisons reflect the subject’s characteristics and the current market.