Question

Given the following information, determine the final appraisal value of the subject property.

Ans: $284,120

	Adjustments
Market conditions	.50% (per month)
Lot Size	$25,000 (per acre)
Effective age (years)	$1,000 (per year)
Living area (sq. ft)	$45.00 (per sq. ft)
Bath	$1,250 (per bath)
Bedroom	$3,000 (per bedroom)

	Subject Property	Comparable Property
Time sold	Today	4 months ago
Lot size (acres)	0.83	0.80
Effective age (years)	8	7
Living area (sq, ft)	2,197	2,383
Bath	3.5	3.5
Bedroom	4	4
Sales price		$287,000

PLEASE SHOW ME HOW TO GET TO THE BOLDED ANSWER

Answer 1

Present value of comparable property = sales price 4 months ago * ( 1 + market condition rate) ^ no of months

= $287,000 * ( 1 + 0.005) ^ 4

= $287,000 * 1.02

=$292,740

Adjustment for lot size = $25,000 * ( Lot size of subject property - Lot size of comparable property)

= $25,000 * (0.83 - 0.80)

=$750

Since price will go down with increasing age of property,

Adjustment for effective age = - $1,000 (Age of subject property - Age of comparable property)

= - $1,000 ( 8 - 7)

= - $1,000

Adjustment for living area = $45 * ( living area of subject property - living area of comparable property)

= $45 * (2,197 - 2,383)

= $45 * (- 186)

= - $8,370

Final appraisal value = Present value of comparable property + adjustment for lot size + adjustment for effective age + adjustment for living area

= $ 292,740 + $750 - $1,000 - $8,370

= $284,120