A subject property is a historic bungalow in a small neighborhood with very few recent sales. One available sale is 0.6 miles away but is a modern townhouse. Another is 2.1 miles away in a competing historic district and is much more similar in age, style, and buyer appeal. Which approach is generally best?
Correct Answer
C) Use the more similar sale from the competing market area if it better reflects buyer behavior and the choice is explained
A comparable from a competing market area may be preferable when it is genuinely more similar and better reflects the actions of typical buyers for the subject. The appraiser should explain why it was selected and why the closer but less similar sale is weaker evidence.
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Previous Question
A subject property sold in an arm’s-length transaction 10 months ago. How may that prior sale generally be handled in the sales comparison approach?
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Paired-sales analysis indicates that an extra garage bay contributes $12,000 in a neighborhood. The subject has a two-car garage. Comparable Sale 3 sold for $438,000 and has only a one-car garage. Ignoring all other differences, what is the comparable’s adjusted sale price?