Question

In: Finance

The sales comparison approach is being used to obtain an indication of the market value of...

The sales comparison approach is being used to obtain an indication of the market value of a single family residence. The subject property is compared to the four properties that sold during the past year in the same neighborhood. Relevant characteristics of the subject and the comparables are presented below.

Subject: current sale, waterfront, 1 car garage, average condition, 2,300 square feet.

Sale 1: sold last week, waterfront, 1 car garage, average condition, 2,600 square feet, for $350,000.

Sale 2: sold last year, waterfront, 1 car garage, average condition, 2,400 square feet, for $300,000.

Sale 3: sold last year, off water, 1 car garage, average condition, 2,200 square feet for $220,000.

Sale 4: sold 3 months ago, off water, 2 car garage, average condition, 2,050 square feet for $280,000.

Expert Solution

For given conditions

Let us subtract as below

Sale 2 - Sale 3 = 200 square feet = $ 80000

therefore 1 square feet = $ 400 ( 1 year ago )

Now with similar prices of last year Sale 1 prices will be

= Sale 2 + 200 square feet ( 2600 - 2400)

= 300000 + 200 * $ 400 = 380000

Difference for Sale 1 prices 1 year ago and 1 week prices

= - $ 30000 (350000 - 380000)

Therefore difference in 1 year and 1 week prices per square feet

= -30000/2600 = -$ 11.54

Therefore current sale prices 1 year ago

= avg of ( Sale 2 and sale 3)

= (300000 +220000 ) / 2 = $ 260000

Therefore current sale prices

= $ 260000 - 11.54*2300 = $ 233462

jeff jeffy answered 2 years ago

1. The sales comparison approach is being used to obtain an indication of the market value...

1. The sales comparison approach is being used to obtain an indication of the market value of a single family residence. The subject property is compared to the four properties that sold during the past year in the same neighborhood. Relevant characteristics of the subject and the comparables are presented below. Subject: current sale, waterfront, 1 car garage, average condition, 2,300 square feet. Sale 1: sold last week, waterfront, 1 car garage, average condition, 2,600 square feet, for $350,000. Sale...

Mr. Lowry wants to appraise the value of his home by the Direct Market Comparison Approach....

Mr. Lowry wants to appraise the value of his home by the Direct Market Comparison Approach. The following information has been gathered about three recent sales in his neighbourhood.. Subject Property Sale #1 Sale #2 Sale #3 Sale Price $875,000 $820,000 $779,000 Sale Time Recent 3 months ago 3 months ago Lot Size 50’ x 110’ 55’ x 100’ 55’ x 110’ 45’x 105’ House Size 3,000 s.f. 3200 s.f. 3,000 s.f. 3000 s.f. Washrooms 3 2 3 1 Fireplace...

In the final step of the sales comparison approach, what are the four actions needed to...

In the final step of the sales comparison approach, what are the four actions needed to arrive at a value conclusion? What are the rules for making sales adjustments in the sales comparison approach? What are the four elements of comparison used in the sales comparison approach?

Discuss the “Comparison” or “Comparable” type of approach to value property and what type of property?

Discuss your understanding of determining value for a real estate property using the Sale Comparison Approach,...

Discuss your understanding of determining value for a real estate property using the Sale Comparison Approach, the Cost Approach and the Income Approach from both the residential (personal home) perspective and the commercial investment property perspective.

Use the following information to answer questions 44-46 using the sales comparison approach. A comparable property...

Use the following information to answer questions 44-46 using the sales comparison approach. A comparable property sold 7 months ago for $231,200. The adjustments for the various elements of comparison have been calculated as follows: Location: +4.5 % Market conditions: -0.54% per month Physical characteristics: + $4,500 Financing terms: -$3,500 Nonrealty items: +$5,200 Conditions of sale, Legal characteristics, Use: 0 What is the value of the market conditions adjustment?* None of the above -$14,800 -$8,600 -$1,200 6 points Question 45...

The Brown Company follows a market-oriented approach, whereas The Columbia Company believes in a sales-oriented approach....

The Brown Company follows a market-oriented approach, whereas The Columbia Company believes in a sales-oriented approach. Considering their approaches, it is evident that _______ has/have an advantage in today’s marketplace because it/they finds/find out what customers want and what they need. Group of answer choices The Brown Company neither both The Columbia Company

Describe the relative sales value approach and when firms would use it.

Consider a new drug being developed for the treatment of a relatively common indication, such as...

Consider a new drug being developed for the treatment of a relatively common indication, such as diabetes mellitus or high blood pressure. In vitro and preclinical studies indicate the compound is extensively metabolized, primarily by CYP3A and partially by CYP2C19. The compound does not appear to be an inducer or inhibitor of any CYP450 enzymes, but it is a potential inhibitor of P-glycoprotein (P-gp). What in vivo drug-drug interaction (DDI) studies should the company developing the compound consider? A. A...

A number of other related drugs with a similar indication to tropisetron are not being considered...

A number of other related drugs with a similar indication to tropisetron are not being considered for use in Alzheimer’s disease. What distinguishes tropisetron from other drugs? Consider the paper and its specific findings.