You are appraising a single-family residence located in the Huntington neighborhood at 4632 NW 56th Drive. The property is being acquired by a mortgage applicant and you have been asked to appraise the property by the lender. Seven potential comparable sales were initially identified. However, three of these seven were highly similar to the subject property in their transactional, physical and locational characteristics. You therefore decided to exclude the other four transactions from the comparable set. The elements of comparison you used to compare and adjust the sale prices of the comparable properties are listed in the market data grid below. The property rights being conveyed in the acquisition of the subject property are fee-simple absolute. Conventional mortgage financing will be used by the purchaser and the acquisition appears to be an arm's length transition. Thus, no adjustments need to be made to the sale prices of the comparable properties for the type of property rights conveyed, financing terms, or conditions of sale. The buyer of comparable #2 was aware that she would have to replace one of the air conditioning units immediately after acquiring the property (which she did); thus, she was able to negotiate a $3,000 price reduction from the seller. Comparable #1 sold six months ago, while comparable #2 and #3 sold three months ago Based on your knowledge of recent price appreciation in this market, you have decided that comparable #1 would sell for 2% more if sold today and that comparable #2 and #3 would sell for 4% more if sold today. The subject property is located in Huntington, as is comparable #1. However, comparable #2 and #3 are located in Kensington and Millhoper. Although Huntington is a high-end neighborhood, both Kensington and Millhoper are generally considered to be slightly more desirable. In fact, homes in these two neighborhoods generally sell for about a 3% price premium relative to similar homes in Huntington because of their location. In the neighborhoods of Kensington and Millhoper, an incremental square foot of lot size is worth approximately $35 per square foot. In the neighborhoods of Kensington and Millhoper, an incremental square foot of living area is approximately $75 per square foot. Each year of effective age reduces the value of properties in this market by about $2,500 per year. You experience suggests that each additional half-bath is worth $750; each additional full bath $1,200. Additional garage spaces, wood decks, and pools in these neighborhoods are worth $10,000, $2,500, and $15,000, respectively. No significant non-realty items were included in the comparable transactions. Based on the above discussion of the elements of comparison, complete an adjustment grid for the three comparable properties, using Exhibit 7-8 on page 177 as a formatting guideline. What is the final adjusted price indication of the subject's value) for comparable 1, 2, and 3? Use pages 175-177 in the textbook to help you come up with you answers. Elements of Comparison Subject Comp Sale 1 Comp Sale 3 Comp Sale 2 $525,000 S510,000 $499.000 Same Same Fee simple Conventional Arm's length Same Same Same None 3 mos, ago: add 2% total Same Same $3,000 6 mos ago: add 4% total Same Same None 6 mos. ago: add 4% total Today Huntington Huntington Kensington Millhoper Sale price of comparable Transaction characteristics Property rights conveyed Financing terms Conditions of sale Expenditures immed, after purchase Market conditions Property characteristics Location Physical characteristics Site/lot size Construction quality Condition Effective age Living area Number of baths Garage Spaces Porch, patio, deck Fence, pool, etc. Economics characteristics Use Nonrealty components 6.662 sq.ft Typical Average 5.5 years 3,473 sq.ft 3.0 baths 2-car Cov. porch/wood deck None NA Single family None 6,700 sq, Typical Average 7 years 3.920 sq. ft. 3.5 baths 2-car Cov, porch None 6,800 sq. Typical Average years 3.985 sq.ft 3.0 baths 2-car Cov, porch Pool NA Same None 6.600 sq. Typical Average 10 years 3,835 sq. ft. 2.0 baths I-car Cov, porch Pool NA NA Same Same None None You are appraising a single-family residence located in the Huntington neighborhood at 4632 NW 56th Drive. The property is being acquired by a mortgage applicant and you have been asked to appraise the property by the lender. Seven potential comparable sales were initially identified. However, three of these seven were highly similar to the subject property in their transactional, physical and locational characteristics. You therefore decided to exclude the other four transactions from the comparable set. The elements of comparison you used to compare and adjust the sale prices of the comparable properties are listed in the market data grid below. The property rights being conveyed in the acquisition of the subject property are fee-simple absolute. Conventional mortgage financing will be used by the purchaser and the acquisition appears to be an arm's length transition. Thus, no adjustments need to be made to the sale prices of the comparable properties for the type of property rights conveyed, financing terms, or conditions of sale. The buyer of comparable #2 was aware that she would have to replace one of the air conditioning units immediately after acquiring the property (which she did); thus, she was able to negotiate a $3,000 price reduction from the seller. Comparable #1 sold six months ago, while comparable #2 and #3 sold three months ago Based on your knowledge of recent price appreciation in this market, you have decided that comparable #1 would sell for 2% more if sold today and that comparable #2 and #3 would sell for 4% more if sold today. The subject property is located in Huntington, as is comparable #1. However, comparable #2 and #3 are located in Kensington and Millhoper. Although Huntington is a high-end neighborhood, both Kensington and Millhoper are generally considered to be slightly more desirable. In fact, homes in these two neighborhoods generally sell for about a 3% price premium relative to similar homes in Huntington because of their location. In the neighborhoods of Kensington and Millhoper, an incremental square foot of lot size is worth approximately $35 per square foot. In the neighborhoods of Kensington and Millhoper, an incremental square foot of living area is approximately $75 per square foot. Each year of effective age reduces the value of properties in this market by about $2,500 per year. You experience suggests that each additional half-bath is worth $750; each additional full bath $1,200. Additional garage spaces, wood decks, and pools in these neighborhoods are worth $10,000, $2,500, and $15,000, respectively. No significant non-realty items were included in the comparable transactions. Based on the above discussion of the elements of comparison, complete an adjustment grid for the three comparable properties, using Exhibit 7-8 on page 177 as a formatting guideline. What is the final adjusted price indication of the subject's value) for comparable 1, 2, and 3? Use pages 175-177 in the textbook to help you come up with you answers. Elements of Comparison Subject Comp Sale 1 Comp Sale 3 Comp Sale 2 $525,000 S510,000 $499.000 Same Same Fee simple Conventional Arm's length Same Same Same None 3 mos, ago: add 2% total Same Same $3,000 6 mos ago: add 4% total Same Same None 6 mos. ago: add 4% total Today Huntington Huntington Kensington Millhoper Sale price of comparable Transaction characteristics Property rights conveyed Financing terms Conditions of sale Expenditures immed, after purchase Market conditions Property characteristics Location Physical characteristics Site/lot size Construction quality Condition Effective age Living area Number of baths Garage Spaces Porch, patio, deck Fence, pool, etc. Economics characteristics Use Nonrealty components 6.662 sq.ft Typical Average 5.5 years 3,473 sq.ft 3.0 baths 2-car Cov. porch/wood deck None NA Single family None 6,700 sq, Typical Average 7 years 3.920 sq. ft. 3.5 baths 2-car Cov, porch None 6,800 sq. Typical Average years 3.985 sq.ft 3.0 baths 2-car Cov, porch Pool NA Same None 6.600 sq. Typical Average 10 years 3,835 sq. ft. 2.0 baths I-car Cov, porch Pool NA NA Same Same None None