When analyzing sales for comparable unit development, what is typically the first adjustment made?

In the analysis of sales for comparable unit development, the first adjustment often pertains to financing because it can significantly affect the price at which a property is sold. Financing adjustments account for differences in the terms under which properties were sold. For instance, if one comparable sale involved seller financing or was sold at a below-market interest rate, adjustments need to be made to ensure that the sales prices reflect the true market value and costs of financing for comparable transactions.

Making the financing adjustment first is crucial as it sets a level playing field when comparing the raw sales prices of different properties. Once financing is adjusted, analysts can proceed with other adjustments, such as size, condition, or location, knowing that the fundamental financing aspects have been normalized across the comparable properties. This method ensures a more accurate and realistic appraisal of property values based on the characteristics and market conditions impacting their sales.