In the garage example, how much is the indicated adjustment for the four-car garage?

• A. The garage adds $50,000 in value
• B. The garage adds $20,000 in value
• C. The garage adds $5,000 in value
• D. The garage adds $0 in value

Answer: (B)

In the Sales Comparison Approach, adjustments for features like garage capacity reflect the market's value of those differences. The four-car garage is a significant feature, and the adjustment is the amount the market adds to the price for having that extra capacity. In this garage example, market data from paired sales isolates the value of the four-car garage at twenty thousand dollars. So, when you adjust a comparable property to reflect the subject having a four-car garage (or vice versa, depending on which property has the feature), you would apply a +$20,000 adjustment. This shows that the extra garage space adds about twenty thousand dollars of value in the market.

The other amounts would imply either a larger premium or no premium at all, which the market data in this problem do not support.