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In the sales comparison approach, assume Sale #1 sold for $60,000 and, in the appraiser's opinion, it is 15% superior to the subject property. What is the value of the subject:

a. $9,000
b. $51,000
c. $55,000
d. $69,000

1 Answer

6 votes

Final answer:

When using the sales comparison approach to value a property that is 15% less valuable than another which sold for $60,000, the subject property's value is calculated to be $51,000.

Step-by-step explanation:

In the sales comparison approach, if Sale #1 sold for $60,000 and is considered to be 15% superior to the subject property, we must calculate the value of the subject property by reducing the sale price of Sale #1 by 15%. A property that is 15% less valuable would be worth 85% (100% - 15%) of Sale #1's sale price. Therefore, we calculate the subject property value as follows:

Subject Property Value = Sale #1 Price × (1 - Superiority Percentage)

Subject Property Value = $60,000 × 0.85

Subject Property Value = $51,000

Based on these calculations, the correct answer would be option b, $51,000, representing the value of the subject property.

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