Question

A subject property has four bedrooms. The comparable property has three bedrooms and recently sold for $225,000. The value of a bedroom is estimated to be $30,000. In all other respects, the properties are the same. What is the indicated value of the subject property?

Answer 1

The indicated value of the subject property with four bedrooms is $255,000, calculated by adding the value of one extra bedroom ($30,000) to the sales price of the comparable property with three bedrooms ($225,000).

Step-by-step explanation:

To evaluate the indicated value of the subject property, we will use the sales comparison approach taking into account the value difference attributed to the number of bedrooms. The comparable property sold for $225,000 with three bedrooms. Since the value of a bedroom is estimated to be $30,000, and the subject property has one more bedroom, we will add this amount to the sale price of the comparable property.

The calculation is as follows:

Value of comparable property: $225,000

Value of one additional bedroom: $30,000

Indicated value of subject property: $225,000 + $30,000 = $255,000

Therefore, the indicated value of the subject property is $255,000.