What is the correct first adjustment in the sales comparison approach?

The first adjustment in the sales comparison approach is typically related to financing. This adjustment accounts for differences in the financing terms between the comparable sales and the property being appraised. When comparing properties, it's crucial to ensure that any discrepancies in how the properties were financed — such as seller financing, interest rates, or terms of the mortgage — are considered, as these can significantly impact the sale price.

By addressing financing first, the appraiser sets a baseline for a fair comparison that reflects the pure market value of the properties, minimizing the influence of financing arrangements. This means that if one property sold with very favorable financing conditions, while another did not, adjusting for these differences provides a clearer picture of each property's market value independent of those financing options.

Other adjustments, while important in the overall comparison, typically follow the financing adjustment because they address aspects like market conditions, physical features, and location, which are secondary to how the sales were structured financially.