Question $6$: Sales Comparison Approach

You are evaluating a multifamily residential property in an urban area to purchase. The property

consists of $10$ units, each approximately $1,000$ square feet. Recent sales data for comparable

properties in the area are provided below:

Property A: Sold for $$1,200,000,8$ units, $800$ square feet per unit, located two blocks

away.

Property B: Sold for $$1,500,000,12$ units, $1,100$ square feet per unit, located in the same

neighborhood.

Property C: Sold for $$900,000,6$ units, $950$ square feet per unit, located one mile away.

Questions:

a$.$ Determine the most relevant comparable property $($or properties$)$ for estimating the value

of the target property and explain your reasoning.

b$.$ Calculate an estimated value for the target property using the sales comparison approach,

adjusting for differences in unit size, number of units, and location if necessary.

c$.$ Discuss any limitations of the sales comparison approach in this scenario and how you

might address them.

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