Question

You are considering the purchase of a 2,300 square foot house that is being offered for $238,500. After researching recent home sales in the area, you find three that are comparable. The first was a 2,500 square foot home that sold for $225,000, the second was a 2,200 square foot home that sold for $200,000 and the third was a 2,000 square foot home that sold for $178,000. Based on your analysis, what would be a reasonable offer on the house? (Round all computations to the nearest dollar.)

A) $210,000
B) $207,000
C) $205,000
D) $201,000

Answer 1

After calculating the average price per square foot based on the recently sold homes ($90 per sq ft), multiplying by the area of the house in question gives an estimated value of $207,000 for the 2,300 square foot house. Therefore, a reasonable offer would be $207,000.The correct answer is option B.

Step-by-step explanation:

To determine a reasonable offer for the 2,300 square foot house, we can use the prices of recently sold homes in the area on a per-square-foot basis. Calculating for each: By using the average price per square foot of $90 (rounding the $90.91 to $90 for simplicity), we can estimate the value of the 2,300 square foot house:Estimated value = 2,300 sq ft * $90/sq ft = $207,000

Based on these calculations, a reasonable offer on the house would be option B) $207,000.The correct answer is option B.