If a subject has energy-efficient windows, and a comparable does not, what is the most likely market-driven approach to adjustment?

If a subject has energy-efficient windows, and a comparable does not, what is the most likely market-driven approach to adjustment?

• A. No adjustment may be necessary if the market does not recognize the difference.
• B. Always apply a fixed adjustment for energy efficiency.
• C. Adjust only if the feature adds monetary value to sale price.
• D. Ignore energy efficiency features entirely.

Answer: (A)

In the sales comparison approach, adjustments are driven by what the market actually recognizes and pays for features. Energy-efficient windows may or may not command a price premium, depending on buyers in that market. If the subject has this feature and comparable sales do not, the prudent step is to look for market evidence of a price difference. If recent transactions show no premium for energy efficiency, no adjustment is made because the market hasn’t monetized that feature. Only if the data indicate a measurable premium would you quantify and apply an adjustment for it. This approach ensures adjustments reflect real market value rather than assumed benefits.

In the sales comparison approach, adjustments are driven by what the market actually recognizes and pays for features. Energy-efficient windows may or may not command a price premium, depending on buyers in that market. If the subject has this feature and comparable sales do not, the prudent step is to look for market evidence of a price difference. If recent transactions show no premium for energy efficiency, no adjustment is made because the market hasn’t monetized that feature. Only if the data indicate a measurable premium would you quantify and apply an adjustment for it. This approach ensures adjustments reflect real market value rather than assumed benefits.