Which of the following is an intangible adjustment?

• A. Financing terms
• B. Replacement cost
• C. Depreciation
• D. Property size

Answer: (A)

Intangible adjustments are those that come from financial terms rather than from the property’s physical attributes. Financing terms affect what a buyer is willing to pay or how the deal is structured, even when the properties are otherwise similar. For example, if a comparable property offers favorable seller financing or a low interest rate, a buyer might value it more highly, or the sale price might reflect that advantage. To compare properties on an apples-to-apples cash basis, the appraiser converts those financing differences into a cash-equivalent adjustment.

Replacement cost relates to what it would cost to reproduce the improvements and is a concept from the cost approach, not a financing adjustment. Depreciation reflects loss in value from age, wear, or obsolescence—it's a physical/functional factor, not an intangible financial term. Property size is a measurable physical characteristic, not an intangible financial item.