Which adjustment cap is applied to comparables in real estate transactions?

The adjustment cap applied to comparables in real estate transactions is fundamental to maintaining accuracy in valuation. In this context, the correct answer indicates a net cap of 15% and a gross cap of 25%.

The purpose of these caps is to provide a framework for appraisers to manage the allowable range of adjustments they can make to comparable properties when determining the value of a subject property. The net cap (the total of all positive adjustments minus the total of all negative adjustments) and the gross cap (the total of all adjustments, regardless of direction) help ensure that adjustments do not exceed a certain threshold, which could otherwise skew the valuation process.

Applying these caps helps in achieving a more reliable and justified value that reflects market conditions while preventing fluctuations that could arise from one-off adjustments. It reinforces the principle of consistency and comparability, which are essential in real estate appraisals.