A comparable sold for $240,000. The roof was known at the time of sale to need replacement, and the buyer spent $18,000 replacing it immediately after closing. What price should be carried into the grid?
Correct Answer
C) $258,000
Why this is correct: an expenditure the buyer knew about and had to make is part of what the property cost them, so it is added back to state what the property in repaired condition commanded. Calculation: $240,000 + $18,000 = $258,000. Why the other choices are wrong: $222,000 deducts the cost, which double-counts a defect the price already reflected; $240,000 compares a property needing a roof with a subject that does not; $249,000 adds half the expenditure with no support for the split.
Why This Is the Correct Answer
Why this is correct: an expenditure the buyer knew about and had to make is part of what the property cost them, so it is added back to state what the property in repaired condition commanded. Calculation: $240,000 + $18,000 = $258,000. Why the other choices are wrong: $222,000 deducts the cost, which double-counts a defect the price already reflected; $240,000 compares a property needing a roof with a subject that does not; $249,000 adds half the expenditure with no support for the split.
More Sales Comparison Questions
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A comparable sale occurred 8 months ago for $425,000. Market conditions indicate property values have increased 0.5% per month since that time. What is the adjusted sale price?
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