A comparable sold for $286,000. The subject has 150 more square feet of gross living area, worth $70 per square foot, and 2,000 fewer square feet of lot, worth $5 per square foot. What is the adjusted price?
Correct Answer
D) $286,500
Why this is correct: the two adjustments run in opposite directions and nearly cancel. Calculation: (150 × $70) = +$10,500; (2,000 × $5) = -$10,000; $286,000 + $10,500 - $10,000 = $286,500. Why the other choices are wrong: $306,500 adds both and $265,500 deducts both, each treating two opposite differences as though they pointed the same way; $286,000 concludes that because the adjustments are close in size neither needs making, which is not the same as their net being small.
Why This Is the Correct Answer
Why this is correct: the two adjustments run in opposite directions and nearly cancel. Calculation: (150 × $70) = +$10,500; (2,000 × $5) = -$10,000; $286,000 + $10,500 - $10,000 = $286,500. Why the other choices are wrong: $306,500 adds both and $265,500 deducts both, each treating two opposite differences as though they pointed the same way; $286,000 concludes that because the adjustments are close in size neither needs making, which is not the same as their net being small.
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A comparable containing 1,850 square feet with 2.0 bathrooms sold for $272,000. The subject contains 1,950 square feet with 2.5 bathrooms. Gross living area is supported at $68 per square foot and a half bath at $4,500. What is the adjusted price?
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A building has a reproduction cost new of $800,000. Physical deterioration is estimated at $150,000, functional obsolescence at $75,000, and external obsolescence at $50,000. What is the depreciated cost of the building?