An appraiser is attempting to estimate the value of a house. The subject property has four bedrooms and a swimming pool. The appraiser has found three comparables that have recently sold:
Comparable Sales Price Bedrooms Swimming Pool
1 $110,000 5 No
2 $101,000 4 No
3 $104,000 3 Yes
The appraiser estimates that each bedroom has a worth of $10,000 and a swimming pool a worth of $15,000. Given the above information, what is the estimated value of the subject property using the average derived from the comparables?
Solving problem:
For comparable 1 to be on the same scale as the property being appraised, we need to adjust its price to reflect the price of a four-bedroom apartment with a swimming pool.
Adjusted price of comparable 1=$110,000-10,000+25,000=125,000
Comparable 2 has the same number of bedrooms as the appraised property but it is without a swimming pool,we adjust the value of comparable to 2 to reflect having a swimming pool
adjusted price of comparable 2=$101,000+25,000=126,000
Comparable 3 with 3 bedrooms should have its have reviewed up to mirror having four bedrooms as below:
adjusted price of comparable 3=$104,000+10,000= 114,000
estimated value of the subject property using the average derived from the comparables=($125,000+126,000+114,000)/3=121,666$
Appraisal would be =121,666$
Instructions
The requirement of this assignment is to determine an Estimated Home Value and write a short paper on the topic of Estimated Home Value. Use the data above to determine the correct estimate for the subject property.
Solve the following problem using the data outlined. Include a table of any adjustments you make to the sales prices of the comparable properties. Next, write a 3 page paper concerning Estimating Home Value. Include your calculations, chart, etc. in your paper. Discuss vital aspects when estimating the value of a property.
