Humber/Ontario Real Estate Course 4 Exam Practice

If a property being appraised has a 45-foot frontage and the comparable property with a 50-foot frontage needs an adjustment based on a $4,500 per front foot adjustment, what is the necessary adjustment for the comparable property?

1. Plus adjustment of $22,500

2. Minus adjustment of $22,500

3. Property frontage differences do not require adjustments

4. Minus adjustment of $4,500

5. Plus adjustment of $4,500

6. No adjustment necessary

The correct answer is: Minus adjustment of $22,500

The necessary adjustment for the comparable property, which has a 50-foot frontage in contrast to the property being appraised that has a 45-foot frontage, can be calculated based on the difference in frontage and the specified value adjustment per front foot. Given that the comparable property is 5 feet wider (50 feet - 45 feet), and the adjustment is set at $4,500 per front foot, the total adjustment amount comes to $22,500 (5 feet x $4,500 per foot). Since the comparable property has more frontage than the subject property, it is considered to have a greater value. Therefore, to accurately align the two properties for comparison, the value of the comparable property must be decreased by this amount. This means that a minus adjustment of $22,500 is necessary to account for the larger frontage in the comparable property. In summary, the correct choice involves recognizing the need to lower the value of the comparable property to reflect the lesser value of the subject property with the smaller frontage, resulting in a necessary minus adjustment of $22,500.