Question

A comparable property sold one month ago for $400,000. That property has a three-car garage, whereas the subject property you’re preparing to list only has a two-car garage.

What should you do to determine the subject property’s market value?

Answer 1

To estimate the market value of a property with a two-car garage, use a comparative market analysis (CMA) and adjust the sale price of a comparable property with a three-car garage by subtracting the value difference caused by the additional garage space.

Step-by-step explanation:

To determine the market value of the subject property, you should look for comparable property sales with similar characteristics to the subject property and make adjustments for differences such as the size of the garage. This method is known as the comparative market analysis (CMA). In the case of the property with the three-car garage selling for $400,000, you would subtract the value a three-car garage adds over a two-car garage from the $400,000 to estimate the subject property's value. To accurately assess this value, you should also consider other factors like location, property condition, and market trends. It's also beneficial to look at a range of comparable sales to ensure that your estimate is robust and reflective of the current market.

Answer 2

The use of comparable analysis in real estate considers value of all components of comparable properties, and estimate price based on sum of features of each property.

So for the $400,000 property that has 3 car garage, we will need to find out the value of one garage.

Then since the garage size is the only difference between the two properties, adjust price downwards by deducting the value of one garage.

Step-by-step explanation: