Question

An appraiser is adjusting the price of comparables to use them in his report. Comparable A is a three-bedroom house with an in-ground swimming pool; it is valued at $275,000. Comparable B is a four-bedroom house with no pool; it is valued at $280,000. If the value of an additional bedroom is $20,000, what is the value added by a pool

Answer 1

Answer:

Explanation:

From the question, a room adds $20,000 to the value of a house.

Comparable B is a 4 bedroom house with no swimming pool right,

Now if Comparable B was a 3 bedroom house instead of a 4 Bedroom we will have

= $280,000 - $20,000

= $260,000

This simply says that the value of Comparable B is $260,000 because it has 3 bedrooms and this value should be the same for any other house with 3bedrooms.

Therefore the difference between Comparable A that has a 3 bedrooms also but is valued at $275,000 and comparable B is the swimming pool.

Hence the value for the swimming pool will be

= 275,000 - 260,000

= $15,000

Therefore the value of the pool is $15,000.

Answer 2

Answer: $15,000

Explanation:

Comparable B is a 4 bedroom house with no swimming pool right.

Okay.

And we also know that a room adds $20,000 to the value of a house as well.

So if Comparable B was a 3 bedroom house instead of a 4 then what would it be?

= $280,000 - $20,000

= $260,000

The means that a house with no swimming pool such as Comparable B but with 3 bedrooms will be valued at $260,000.

But instead Comparable A has a 3 bedrooms yet is valued at $275,000 with the only apparent difference being a swimming pool. The pool therefore accounts for the difference which is,

= 275,000 - 260,000

= $15,000

This means that $15,000 is the value of the pool.