Humber/Ontario Real Estate Course 2 Exam Practice

Salesperson Brown is adjusting the price of a comparable property using the direct comparison approach. The comparable property has a garage valued at $30,000 and the subject property lacks a garage but has a finished recreation room valued at $20,000. What is the total adjustment?

1. Minus adjustment of $50,000 to the comparable.

2. Minus adjustment of $10,000 to the comparable.

3. Plus adjustment of $10,000 to the comparable.

4. Plus adjustment of $10,000 to the subject property.

5. No adjustment needed.

6. Plus adjustment of $50,000 to the comparable.

The correct answer is: Minus adjustment of $10,000 to the comparable.

In this scenario, Salesperson Brown is adjusting the price of a comparable property using the direct comparison approach. The comparable property has a garage valued at $30,000, and the subject property lacks a garage but has a finished recreation room valued at $20,000. To find the total adjustment, you need to consider the difference in value between the garage in the comparable property and the recreation room in the subject property. Since the recreation room value is lower than the garage value, the adjustment would involve subtracting the difference from the comparable property's value. Therefore, the correct answer is a minus adjustment of $10,000 to the comparable property (Option B). This adjustment reflects the lower value of the recreation room compared to the garage in the direct comparison approach.