PSI Virginia Real Estate Practice Exam

In property appraisal, what does the term "adjusting comparables" refer to?

1. Scheduling property viewings

2. Making value adjustments based on property features

3. Calculating the market trends over time

4. Assessing the local housing market

The correct answer is: Making value adjustments based on property features

The term "adjusting comparables" in property appraisal specifically refers to the process of making value adjustments based on the differences in features between the subject property and comparable properties, or "comps." This adjustment is crucial in arriving at an accurate market value for the property being appraised. When appraisers evaluate properties, they look for recent sales of similar properties in the same area. However, no two properties are exactly alike; they may differ in terms of size, condition, location, amenities, and more. Therefore, to ensure a fair comparison, appraisers adjust the sale prices of the comparables. For example, if a comparable property has an additional bedroom or a larger lot size, an adjustment will be made to the value of that property to account for these differences. This meticulous process leads to a more precise valuation of the subject property. In contrast, other options do not describe the adjusting process. Scheduling property viewings relates to organizing appointments for prospective buyers to see properties, not adjusting values. Calculating market trends involves analyzing data over a period, which might inform general valuation perspectives but does not involve direct adjustments to comparables. Assessing the local housing market refers to understanding overall conditions and buyer behavior, again not directly linked to making adjustments for