What is one way of estimating an adjustment for utilities?

• A. Estimating the cost of bringing utilities to the site
• B. Estimating maintenance cost
• C. Estimating depreciation
• D. Estimating property taxes

Answer: (A)

In the sales comparison approach, adjustments reflect differences that affect value between the subject and comparables. For utilities, a practical method is to estimate the cost of bringing utilities to the site—connecting electric, water, sewer, and gas service. This cost represents the market value impact of having access to utilities and is used as the adjustment amount to align the comparable with the subject. If the subject lacks utilities and a comparable has them, you’d add this estimated cost to the comparable’s price; if the subject has utilities and the comparable does not, you’d make the reverse adjustment. Maintenance cost, depreciation, and property taxes are not directly used to adjust for utilities.