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?
Correct Answer
C) $450,000
Step 1: Market-supported garage adjustment = $12,000 for one additional bay. Step 2: Comparable Sale 3 is inferior to the subject because it has only a one-car garage. Step 3: Inferior comparables are adjusted upward to reflect what they would likely have sold for if they matched the subject. Step 4: Adjusted sale price = $438,000 + $12,000 = $450,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
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Previous Question
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?
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An appraiser’s adjusted comparable sales indicate $485,000, $491,000, and $494,000, but the final value conclusion is $520,000 with no additional discussion. Which statement is most accurate?