A comparable sold for $360,000. Its site is valued at $90,000 and the dwelling contains 2,000 square feet. What is the indicated price per square foot of the improvements?
Correct Answer
B) $135.00
Why this is correct: the site contributes value that the improvements did not, so it comes out of the numerator first. Calculation: ($360,000 - $90,000) ÷ 2,000 = $135.00. Why the other choices are wrong: $180.00 leaves the site value in, which overstates what a square foot of building is worth; $45.00 is the site value spread over the building area, a figure that describes nothing; $225.00 adds the site value instead of removing it.
Why This Is the Correct Answer
Why this is correct: the site contributes value that the improvements did not, so it comes out of the numerator first. Calculation: ($360,000 - $90,000) ÷ 2,000 = $135.00. Why the other choices are wrong: $180.00 leaves the site value in, which overstates what a square foot of building is worth; $45.00 is the site value spread over the building area, a figure that describes nothing; $225.00 adds the site value instead of removing it.
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A comparable sold for $355,000. It is in a superior location worth 5%, and has 200 fewer square feet of gross living area than the subject at $70 per square foot. What is the adjusted price?
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Four comparables produce adjusted indications of $298,000, $305,000, $311,000 and $330,000. What is the median indication?