Humber/Ontario Real Estate Course 2 Exam Practice

Which adjustment is necessary when a comparable property has a higher feature than the subject property?

1. A positive adjustment is made.

2. A negative adjustment is made.

3. A no adjustment is needed.

4. Adjustment based on distance is made.

5. Adjustment should only be made for newer properties.

6. Adjustment depends on market conditions.

The correct answer is: A negative adjustment is made.

When a comparable property has a higher feature than the subject property, a negative adjustment is made. This adjustment accounts for the difference in value due to the superior feature of the comparable property. By making a negative adjustment, the appraiser can ensure that the comparison is fair and reflective of the subject property's true value in relation to the comparable property. The other options are incorrect: - A: A positive adjustment would not be made when a comparable property has a higher feature as it would result in overvaluing the subject property. - C: In this case, an adjustment is needed to account for the discrepancy in features between the subject property and the comparable property. - D: While adjustments based on distance may be needed for other comparisons factors, in this scenario, the adjustment is specifically related to the feature difference. - E: Adjustments should not be limited to only newer properties but should be made based on relevant factors affecting the comparables. - F: While market conditions may influence overall adjustments, in this specific case, the adjustment is focused on the feature disparity between properties.