Jefferson elementary school and three blocks from the Park Avenue neighborhood shopping center. Your client is...

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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 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? 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?

Answer rating: 100% (QA)

a Grid for per square foot adjustments Comparable Size sqft Adjustments Ad... View the full answer