You are trying to estimate the value of a property that you are interested in buying. The subject property is located at 322 Rock Creek Road in a new suburb of a large metropolitan area. The property is like many others in the area, with three bedrooms, two baths, a living room, a den, a large kitchen, and a two-car garage. The residence has about 1,800 square feet of air-conditioned space and is of traditional design. The property is located on an interior lot with no potential flooding problems. The quality of construction appears to be about average for the market area. The property being purchased was built within the past two years. Three properties have been chosen as comparables and they also were constructed within the past two years.

Comparable properties in the area have the following characteristics:

	Comparable I	Comparable II	Comparable Ill
Address	123 Clay Street	301 Cherry Lane	119 Avenue X
Sale price	$ 105,300	$ 97,150	$ 92,000
Time of sale	6 months ago	7 months ago	13 months ago
Design	Modern	Traditional	Traditional
Parking	2-car garage	2-car carport	1-car garage
Location	Corner lot	Interior lot	Interior lot
Drainage	Good	Below average	Good
Bedrooms	Four	Three	Two
Baths	Two	Two	Two
Construction	Average	Average	Below average

You have come to some conclusions concerning what you believe the different attributes of the comparable properties are likely to be worth in the market area. Appreciation in house values in the area has been very low over the past eight months, and you think that any properties that have sold within that period would probably not require any adjustments for the time of sale. However, one of the comparable properties sold over a year ago, and you think it will require a $1,840 upward adjustment. You also believe that properties in the area that are located near the creek sell for about $1,540 less than other properties in the area because of a slower rate of runoff after heavy rains. Properties on corner lots generally sell for a premium of about $1,340. Houses with the fashionable modern design usually bring about $1,340 more than those that have traditional design characteristics. Because three-bedroom homes are considered desirable by buyers in the area, an additional fourth bedroom will generally only add about $1,625 in value to a property. However, properties that contain only two bedrooms are rather difficult to sell, and often bring $2,340 less than their three-bedroom counterparts when they are sold. Most homes in the area have a two-car garage, but when properties have a one-car garage, they usually sell for about $1,140 less. A two-car open carport generally reduces the value of the property by a similar amount, or $1,225. The inferior construction quality exhibited by comparable III should reduce its value by about $1,840.

Required:

a. Complete the sales comparison approach to value and assign an estimate of value to the subject property.

b. A second approach using the cost method of valuation will also be used to estimate value. Comparing vacant lot sales in the market area indicates that the value of the lot the subject property is constructed on is $21,500. Air-conditioned space in the dwelling would cost about $36.00 per square foot to reproduce, and the garage would cost approximately $4,550 to reproduce. Complete the cost approach to value, assuming that, because the property being valued is relatively new, no depreciation of the structure is required.