Definition
Proximity adjustments account for location differences affecting value. Proximity to schools, shopping, transit, or undesirable facilities (landfill, highway) creates adjustment differences.
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Proximity adjustments account for the value impact of location differences that aren't reflected in property characteristics. A comparable home closer to excellent schools, convenient shopping, or major employers might command a premium. Conversely, a comp near an undesirable facility (landfill, industrial plant) might require a negative adjustment. Proximity adjustments are common and often significant, particularly in neighborhoods where location quality varies substantially.
Pro Tip
Understand specific proximity factors your market values. School proximity, commute times, and shopping access often command significant premiums.
Example
A comparable home sold for $430,000 but is three blocks from a highly-rated elementary school, while the subject property is two miles away. A proximity adjustment of -$12,000 is made to account for this location disadvantage.