Solve it in details. Step by step The asking price of a property is $700,000 and

Question

Solve it in details. Step by step

The asking price of a property is $700,000 and you are given the following information for a sales comparable evaluation. Property prices increases at 2.60% per annum (inflation rate) $56 per square foot $22,000 per year reduction for age Two-car garage valued at $42,000 compared to $25,000 for a one-car garage Comer property warrants a 15% premium Swimming pool worth $30,000 considered a good selling point in this neighborhood What is the estimated value of the subject property using the sales comparable approach?.

Explanation / Answer

Step 1:

Comparable

Property Value = 56*15000 = 840000

Less : Reduction for age = 9*22000 = 198000

Add : Car Garrage = 25000

Add: Swimming Pool = $ 30000

Estimated Sale Value = 697000

Selling Price = 650000

Discount Allowed percentage = (697000-650000)/697000

Discount Allowed percentage = 6.7432%

Step 2 :

5 month ago

Property Value = 56*16200 = 907200

Less : Reduction for age = 12*22000 = 264000

Add : Car Garrage = 42000

Add: Swimming Pool = 0

Estimated Sale Value for non cornor property = 685200

Corrner Property Warrent = 685200*15% = 102780

Estimated Sale Value cornor property = 685200+102780

Estimated Sale Value cornor property = 787980

Less : Discount Allowed = 787980*6.7432% = $ 53,135.1

Selling Price 5 Month ago = 734,844.9

inflation rate for 5 month = (1+2.6%)^(5/12) -1

inflation rate for 5 month = 1.075%

Current Selling Price of subject Property = Selling Price 5 Month ago *(1+ inflation rate for 5 month)

Current Selling Price of subject Property = 734844.9*(1+1.075%)

Current Selling Price of subject Property = 742,744 (approx)

Answer

Current Selling Price of subject Property = 742,744

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