Adjusted Sales Price
Definition and meaning of Adjusted Sales Price in real estate.
Adjusted sales price is the estimated value of a subject property derived by taking the actual sale price of a comparable property and making monetary adjustments for differences between the two. These adjustments account for variations in features, condition, size, and location.
In more detail
This concept is a cornerstone of the sales comparison approach, which is the primary valuation method used by appraisers and real estate agents. When preparing a comparative market analysis, professionals select recently sold homes that are similar to the subject property. Since no two homes are identical, they add value to the comparable home's sale price for features the subject property has but the comparable lacks.
Conversely, they subtract value for features the comparable has but the subject property lacks. The final adjusted sales prices of multiple comparable properties help estimate the fair market value of the subject home.
Key facts
| Category | Buying & Selling |
|---|---|
| Used in | Sales comparison appraisal method |
| Who calculates | Appraisers and real estate agents |
| Applies to | Comparable properties rather than the subject property |
An appraiser adjusts the sales price of a comparable home upward because it lacks the fireplace that is present in the subject property being valued.
Frequently asked questions
Why do appraisers adjust comparable sales prices?
Appraisers make adjustments to account for differences between homes, ensuring that the final valuation reflects what the comparable home would have sold for if it were identical to the subject property.
Do you adjust the subject property or the comparable property?
You always adjust the sale price of the comparable property upward or downward to match the features of the subject property.