You're doing a CMA on a two-bed, two-bath property with a pool. In your area, bedrooms are worth $15,000, bathrooms $7,000, and pools $10,000. Comp A is a three-bedroom, two-bath property without a pool that sold recently for $350,000. What adjusted value should you use for Comp A?

Rationale

$345,000 should be used as the adjusted value for Comp A.

To determine the adjusted value of Comp A, we need to account for the differences in bedrooms, bathrooms, and pool availability compared to the subject property. Comp A has one additional bedroom and no pool, which will affect its valuation.

A ($355,000) YOUR ANSWER

This value incorrectly adds $15,000 for the extra bedroom but fails to subtract the value of the pool, resulting in an inflated estimate. The correct adjustment should involve both adding for the bedroom and subtracting for the lack of a pool.

B ($345,000) CORRECT

This is the correct calculation. Starting with Comp A's sale price of $350,000, we add $15,000 for the additional bedroom (making it $365,000) and then subtract $10,000 for the pool that Comp A does not have, resulting in an adjusted value of $345,000.

C ($340,000) YOUR ANSWER

This option suggests an adjustment that does not accurately reflect the value of the additional bedroom. It subtracts too much from Comp A's sale price, resulting in an undervalued estimate.

D ($325,000) YOUR ANSWER

This value significantly undervalues Comp A by not accounting for the additional bedroom at all. It assumes a higher deduction than warranted, failing to accurately reflect the market value of the property.

Conclusion

The adjusted value of Comp A is calculated by adding the value of its additional bedroom and subtracting the value of the pool it lacks. This adjustment leads to a final valuation of $345,000, accurately reflecting the comparative market analysis. Understanding these adjustments is crucial for effective property valuation in real estate transactions.

You're doing a CMA on a two-bed, two-bath property with a pool. In your area, bedrooms are worth $15,000, bathrooms $7,000, and pools $10,000. Comp A is a three-bedroom, two-bath property without a pool that sold recently for $350,000. What adjusted value should you use for Comp A?

$345,000 should be used as the adjusted value for Comp A.

Related Questions

Related Quizzes

How familiar were you with this question?

Report an Issue

Rate this Practice Test