A subject property's value needs to reflect improvements made. What is the necessary adjustment if improvements do not match the cost?

The necessary adjustment when improvements made to a property do not match their cost is to reflect the actual appraised value. This approach ensures that the value of the subject property aligns with what an appraiser has determined is the property's worth in the current market, taking into account the quality and condition of the improvements, as well as other comparable properties.

Adjusting based on the actual appraised value allows for an accurate representation of what buyers would realistically pay for the property, rather than inflating the worth based on the costs of improvements that may not have yielded a proportional increase in value. This method helps to maintain objectivity in the appraisal process and prevents pricing inconsistencies that might mislead potential buyers.

In contrast to other options, relying on market trends or a seller's expectations can lead to subjective valuations, which may not align with buyer perceptions in the current real estate environment. Removing the improvement value altogether would ignore the benefits those improvements may provide, resulting in an undervalued assessment of the property. Therefore, reflecting the actual appraised value is essential for maintaining a fair and accurate representation of the property’s worth.