You are trying to estimate the value of a property that you are interested in buying. The subject property is located at 322 Rock Creek Road in a new suburb at a large metropolitan area. The property is like many others in the area, With three bathrooms, a living room, a den, a large kitchen, and a two car garage. the residence has about 1,800 square feet of air conditioned space and is of traditional design. The property is located on an interior lot with no potential flooding problems. The quiality of construction appears to be about average for the market. The property being purchased was built within the past two years. Three properties ave been chosen as comparable and they also were constructed within the past two years. Comparable properties in the area have the following characteristics:
Comparable I Comparable II Comparable III
Address 123 Clay St. 301 Cherry Lane 119 Avenue X
Sale Price $ 85,000 $ 79,000 $ 75,000
Time of Sale 6 Months ago 7 Months ago 13 Months ago
Design Modern Traditional Traditional
Parking 2-Car Garage 2-Car Garage 1-Car Garage
Location Corner lot Interior Lot Interior Lot
Drainage Good Bellow Average Good
Bedrooms Four Three Two
Baths Two Two Two
Construction Average Average Bellow Average
You have to come to conclusions concerning hat you believe the different attributes f the comparable properties are likely to be worth in the market area. Appreciation in house value in the areas has been very low ver the past eight months, and you think that any properties that have sold within hat period would probably not require adjustments or the ime of sale. However, one of the comparable properties sold over a year ago, and you think it will eequire a $1,500 upward adjustment. You also believe that properties in the area because of a slower rate of runoff fter heavy rains. Properties on corner lots generally sell for a premium of about $1,000. House with the fashionable modern design usually bring about $1,000 more than those that have traditional design characteristics. BEcause three-bedroom homes are considered desirable by buyers in the area, an additional fourth bedroom will generally only add about $1,200 in value to a property. However, properties that can only contain only two bedrooms are rather difficult to sell, and often bring $2,000 less than three-bedroom counterparts when they are sold. Most homes in the area have two-car garage, but when properties have a one-car garage, they usually sell for about $800 less. A two-car open carpot generally reduces the value of the property by a similar ammount, or $800. The inferior construction quality exhibited by comparable III should reduce its value by about $1,500.
a. You plan to complate the sales comparison approach to value and assign and estimate of value to the subject property. Give specific reasons for your choice of value.