A developer builds a home for $200,000. The materials and labor were $175,000. An appraiser valued the home at $235,000, and it eventually sold for $240,000. Which of these is the price?

Rationale

$240,000 is the selling price of the home.

The selling price reflects the amount for which the home was ultimately sold, which in this case is $240,000. This figure represents the market value agreed upon by the buyer and seller, distinct from the costs incurred to build the home or its appraised value.

A ($175,000) YOUR ANSWER

This amount represents the total costs incurred for materials and labor in building the home, not the selling price. While these costs are crucial for understanding the developer's expenses, they do not indicate what the home sold for in the market.

B ($235,000) YOUR ANSWER

This figure is the appraised value of the home, determined by an appraiser based on various market factors. However, appraisals do not always align with the final selling price, which can be influenced by buyer willingness and market dynamics.

C ($240,000) CORRECT

This is the final selling price of the home, indicating the actual transaction amount agreed upon by the buyer and seller. It reflects the market conditions and buyer demand at the time of sale, making it the correct answer to the question.

D ($200,000) YOUR ANSWER

This amount is the cost incurred by the developer to build the home, which includes the expense of materials and labor. While it indicates the investment made by the developer, it does not represent the home's value in the real estate market or its selling price.

Conclusion

The selling price of a property is the final amount for which it is sold, which in this scenario is $240,000. Other figures, such as construction costs and appraised values, provide context but do not reflect the actual transaction price. Understanding this distinction is critical in real estate transactions, where market dynamics can lead to selling prices that diverge from both building costs and appraised values.

A developer builds a home for $200,000. The materials and labor were $175,000. An appraiser valued the home at $235,000, and it eventually sold for $240,000. Which of these is the price?

$240,000 is the selling price of the home.

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