Definition of "Adjusted sales price"

Dan Demeo real estate agent

Written by

Dan Demeoelite badge icon

Coldwell Banker Residential Brokerage - Demeo Realty Group

The adjusted sales price is also known as price adjustment or adjustment in appraisals. A definition for the adjusted sales price is the appraisal determined through the market approach or the foundation of comparative market analysis (CMA). An adjusted sales price comes from analyzing the recently sold comparables and adding or subtracting differences to reach an estimated property value.

When a sale price of a comparable is adjusted to the appraised property by taking into account factors that can differentiate the two properties, appraisals reach the adjusted sales price. They adjust the price of the comparable property to the property being appraised.

What is an Adjusted Sale Price in Real Estate Appraisals?

To reach the adjusted sale price of a property, the appraiser looks at recent sales in the area of comparable properties to estimate the property’s value. This method requires an active market of similar sold properties for a more accurate valuation. The adjusted sale price is determined by several factors that differentiate the comparable property and the appraised property. At the end of the appraisal, the adjusted sale price is different from the comparables. It reflects the properties’ condition, the time of the construction, the wear and tear of the properties, and any other differences between them.

Important to note here is that not only one comparable is used during the market approach method. It is best to use several to take all the factors into account and reach a more accurate estimated value.

Factors that Influence the Adjusted Sales Price

We look at comparables in real estate during an appraisal. It would be ideal for the comparables’ sale to have been as close to the present time as possible and be as similar to the appraised property as possible. If we manage to find those types of comparables, then the adjustment process is irrelevant. 

However, we don’t live in an ideal world, and several factors will influence the adjusted sales price:

  • Estate interest - when we consider the type of estate the owner has, the price of a comparable estate might be inaccurate to the evaluated property’s worth. It might be better to discount properties if the fee simple estate differences are too significant, but it’s not always possible to from lack of other comparables. A fee simple absolute might have a bigger value than a fee simple defeasible;
  • Buying a property in Cash - when a buyer doesn't apply for a loan and offers a full cash offer the seller may take some money off the listing price.
  • Market conditions - the economy can lead to an increase or decrease in prices unless the comparables sold in the week before the appraisal;
  • Conditions of sale - the sale of the comparables could be forced sales;
  • Location - differences that can affect public transport, traffic, quality of schools, available shops or other utilities;
  • Aspect - the most obvious differences are the physical ones: condition, age, design, quality, or features (a balcony, a patio, a terrace, etc.)
  • Use - during real estate appraisals, the property is evaluated at its highest and best use. If the comparables or the appraised property are not at their highest and best use, adjustments are made to the price.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.


Popular Real Estate Terms

Tax credit aimed at encouraging the conservation of natural resources, as well as the development of alternative resource. ...

Alias is a different name by which a person is known.In the real estate world, there are times when an agent goes by a different name than the one he/she was originally named by his/her ...

Properties that about and actually touch and share a common border. Properties B and C are contiguous. Property A is adjacent to properties B and C, but it is not contiguous. ...

Sewer system built into the streets of a neighborhood that is capable of accommodating the excess water flow of a heavy storm without backing up or flooding. ...

An increase in land occurring from the withdrawal of a body of water. Normally, when reliction occurs, the increase in land area belongs to the individual having water rights in the area. ...

Property taken over by the government because the owner has failed to pay taxes on it. The property may revert back to the owner when the taxes are paid. If not, the government may sell the ...

Beams providing structural floor support. Flooring is directly attached to the floor joists. See also joist. ...

Measure of central tendency that is a measure of the center of the data; also called an average. Mean and standard deviation are the two most widely used statistical measures that summarize ...

The handling of an account, as a mortgage serviced by a mortgage banker. The periodic, routine maintenance of household items. ...

Popular Real Estate Questions