Question

A comparable property sold six months ago for $250,000. Prices of similar properties have increased by 5% since that time. At what amount would a broker doing a competitive market analysis on a similar house likely value the subject property?

Answer 1

The new value of the property is calculated by first finding 5% of the original price of $250,000, which is $12,500, and then adding this to the original price to get a new value of $262,500.

Step-by-step explanation:

The question involves calculating the new value of a property after a percentage increase in price over a specific period.

A property that sold for $250,000 six months ago has increased in price by 5%. To find the new value of the property, we calculate 5% of $250,000 and then add it to the original price:

5% of $250,000 = 0.05 × $250,000 = $12,500.

Therefore, the new value of the property = $250,000 + $12,500 = $262,500.

Using this information, a broker conducting a competitive market analysis would likely value a similar house at $262,500.