Texas Property Tax Consultant Practice Exam

Which of the following is NOT considered a quantitative adjustment in the sales comparison approach?

1. Financing terms

2. Conditions of sale

3. Condition of improvements

4. Leasehold interest

The correct answer is: Financing terms

In the sales comparison approach to property valuation, quantitative adjustments are made to account for differences between comparable sales and the property being appraised. These adjustments address measurable factors that can directly influence the sale price, such as physical characteristics, sale conditions, and external factors. Financing terms, while important, are generally regarded as qualitative adjustments rather than quantitative ones. This is because financing terms involve the specifics of how a transaction was financed—such as interest rates or seller concessions—which affect the sale but do not provide a numeric comparison point like the actual characteristics of the property or market influences. Therefore, these terms are evaluated in more subjective terms rather than being numerically adjusted. Conditions of sale often relate to circumstances surrounding how a property was sold (e.g., whether it was a forced sale or a voluntary transaction), and they typically have a measurable impact on value, making them a quantitative aspect of analysis. Condition of improvements refers to the state of the physical attributes of a property, which can be measured and directly compared to similar properties. This is also a quantitative element that informs price adjustment based on the physical quality or status of the property. Leasehold interest deals with the rights held by a tenant under a lease agreement, which can also be quantitatively assessed as it