A comparable sold for $320,000, was adjusted to $312,000, and contains 2,080 square feet. What adjusted price per square foot does it indicate?
Correct Answer
C) $150.00
Why this is correct: the rate carried forward is derived from the adjusted price, since that is the figure now comparable to the subject. Calculation: $312,000 ÷ 2,080 = $150.00. Why the other choices are wrong: $153.85 uses the unadjusted sale price and reintroduces the differences the grid removed; $156.00 and $148.57 divide by 2,000 and 2,100 rather than the comparable’s actual area.
Why This Is the Correct Answer
Why this is correct: the rate carried forward is derived from the adjusted price, since that is the figure now comparable to the subject. Calculation: $312,000 ÷ 2,080 = $150.00. Why the other choices are wrong: $153.85 uses the unadjusted sale price and reintroduces the differences the grid removed; $156.00 and $148.57 divide by 2,000 and 2,100 rather than the comparable’s actual area.
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Previous Question
Comparable A sold for $240,000 and contains 1,500 square feet. Comparable B sold for $375,000 and contains 2,500 square feet. The subject contains 2,000 square feet. Using the average of the two indicated rates, what value is indicated for the subject?
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A property is located in a neighborhood where homes typically sell for $300,000, but the subject property is a $500,000 custom home. This situation illustrates the principle of: