A comparable closed at $305,000, which included $5,000 in seller-paid concessions. The dwelling contains 2,000 square feet. What price per square foot should be carried into the analysis?
Correct Answer
B) $150.00
Why this is correct: concessions inflate the stated price above what the real property alone commanded, so they come out before the rate is derived. Calculation: ($305,000 - $5,000) ÷ 2,000 = $150.00. Why the other choices are wrong: $152.50 uses the stated price and carries the concession into every later adjustment; $155.00 adds the concession rather than removing it; $147.50 removes $10,000, which is twice what was granted.
Why This Is the Correct Answer
Why this is correct: concessions inflate the stated price above what the real property alone commanded, so they come out before the rate is derived. Calculation: ($305,000 - $5,000) ÷ 2,000 = $150.00. Why the other choices are wrong: $152.50 uses the stated price and carries the concession into every later adjustment; $155.00 adds the concession rather than removing it; $147.50 removes $10,000, which is twice what was granted.
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