Question

Under the sales comparison approach to valuation, a subject property has 3 bedrooms, two bathrooms and is on a golf course. The comparable property has 3 bedrooms, two bathrooms and is not on a golf course. The comparable property is priced at $690,000. The value of a golf course location is estimated to be $70,000. How much should you price the subject property?

Answer 1

Answer:

The subject property should be valued at $760,000

Explanation:

Sales comparison approach to valuation in real estate values properties by comparing their similar characteristics, and the features are priced. The total value of a property is thus the addition of all features.

In the instance given, both properties have 3 bedrooms and 2 bathrooms and so using comparison theses features are equally priced at $690,000.

So the property with the golf course will have $690,000 added to the value of the golf course ($70,000).

That is $760,000.