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Jefferson elementary school and three blocks from the Park Avenue neighborhood shopping center. Your client is contemplating buying the lot for personal use as
Jefferson elementary school and three blocks from the Park Avenue neighborhood shopping center. Your client is contemplating buying the lot for personal use as a housing lot. The parcel 80 by 120 feet, is located in the middle of the block, is level and on-grade with the street, and has an excellent view. The asking price is $40,000. Three sales of comparable lots, all on-grade, occurred in the last year: Comparable 1: 80 x 120 feet, and directly across the street, sold 2 months ago for $37,500, lacks a view. Comparable 2: 70 x 120 feet, one block nearer school and shopping center, sold 3 months ago for $36,500, has excellent view. Comparable 3: 80 x 120 feet, located one block nearer Jefferson school and neighborhood shopping center, sold six months ago for $40,000, very similar to the subject in all physical respects and has a comparable view. Appropriate adjustments are as follows: For time: values are increasing 1 percent per month For location: being one block nearer school and shopping center adds 5 percent to land value. Being directly across street means exactly comparable to subject. Having high- quality vie adds 5 percent to value relative to not having a view. a. Set up a grid to adjust the sales prices on a per square foot basis. b. Make the necessary adjustments and estimate the value of the subject site. (put 25%, 25%, and 50% weights respectively on Comp A, Comp B, and Comp C when you compute the final value of the subject site.) c. Is the proposed purchase at $40,000 a reasonable buy?
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