For a training exercise on broker pricing, Maya assigns weights of 50%, 30%, and 20% to three already adjusted comparable values of $420,000, $430,000, and $440,000. What weighted value indication does the exercise produce?
Correct Answer
B) $427,000
Step 1: Weight Comparable 1: $420,000 × 50% = $210,000. Step 2: Weight Comparable 2: $430,000 × 30% = $129,000. Step 3: Weight Comparable 3: $440,000 × 20% = $88,000. Step 4: Add the weighted amounts: $210,000 + $129,000 + $88,000 = $427,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
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.
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A comparable has the same gross living area as the subject, but its awkward floor plan and smaller bedroom count make it less appealing to typical buyers in that market. Which element of comparison is most directly involved?
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