Real Estate Term of the Day: Adjustments In Appraisal & Adjusted Sales Price

Real Estate Term of the Day: Adjustments In Appraisal, Adjusted Sales Price

ADJUSTMENTS IN APPRAISAL – dollar value or percentage amounts that, when added to or subtracted from the sales price of a comparable, provide an indication of the value of a subject property.  Adjustments are necessary to compensate for variation in the features of the comparable relative to the subject (Barron’s Dictionary of Real Estate Terms)

ADJUSTED SALES PRICE – in appraisal, the indicated price of a comparable property after adjustments have been made to account for differences between comparable and subject properties (Barron’s Dictionary of Real Estate Terms)

When I provide a CMA (Comparative Market Analysis) I will use this general theory to help me understand the true value of a home (subject property).  The most common adjustments I will make on a CMA are:

  • Seller Concessions (did the Sellers pay concessions to close the deal?)
  • Differences in Square Footage (including: above ground sqft, below grade sqft & finished sqft)
  • Number of Bedrooms & Number of Bathrooms
  • Number of Garage Spaces
  • Kitchen Condition
  • Overall Condition (including exterior, interior upgrades)
  • Location of the Home (such as lot features & lot location)

This analysis will lead me to the adjusted sales prices for each comparable property which can help understand the value of the subject property.

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