A ranch house with a double garage is being valued. The house next door, which is similar except that it lacks a garage and has an outside deck, was sold last month for $138,000. Experience in that area shows that a two-car garage is probably worth $10,000 to buyers, while in general, they will pay only $500 extra for a deck. The ranch house is most likely to sell for around

This choice is significantly lower than the expected value. It suggests that the value of the ranch house decreased dramatically without accounting for the value added by the garage. Given that the garage alone is worth approximately $10,000, this option does not reflect the adjustments needed from the base price of $138,000.

This option still falls short of the expected value. It implies a reduction in value for the garage and does not account for the full $10,000 increase that buyers typically assign to a garage. Additionally, this choice overlooks the fact that the selling price should remain above the base price of the similar house next door.

This choice suggests an overestimation of the value. It implies an additional $1,000 beyond the correct adjustment, potentially overvaluing the deck's contribution to the price. While it recognizes the garage's value, it inaccurately applies the deck's worth as a greater factor than it truly is in this context.