A comparable property is currently offered for sale for $89,900. Properties in this area have a typical sale-to-list ratio of 92%. When using this property as a comparable listing, what is the adjustment that is necessary for sale-to-list ratio?

A comparable property is currently offered for sale for $89,900. Properties in this area have a typical sale-to-list ratio of 92%. When using this property as a comparable listing, what is the adjustment that is necessary for sale-to-list ratio?

• A. +$7,192
• B. -$7,192
• C. +$89,900
• D. -$89,900

Answer: (B)

Key idea: sale-to-list ratio shows what portion of the asking price houses actually sell for. Here, the market typically sells for 92% of the list price. To convert a listed price into a typical sale price, multiply by 0.92. Compute the expected sale price for the listed property: 89,900 × 0.92 = 82,708. The difference between the listing price and this expected sale price is 89,900 − 82,708 = 7,192. Since the property would likely sell for about 7,192 less than its list price, the adjustment to use on the comparable listing is a downward one of 7,192 (−$7,192).

Key idea: sale-to-list ratio shows what portion of the asking price houses actually sell for. Here, the market typically sells for 92% of the list price. To convert a listed price into a typical sale price, multiply by 0.92.

Compute the expected sale price for the listed property: 89,900 × 0.92 = 82,708. The difference between the listing price and this expected sale price is 89,900 − 82,708 = 7,192. Since the property would likely sell for about 7,192 less than its list price, the adjustment to use on the comparable listing is a downward one of 7,192 (−$7,192).