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.s

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. However, 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 three months ago, while comparables 2 and 3 sold six months ago. Based on your knowledge of recent price appreciation in this market, you have decided that comparable 2 would sell for 2 percent more if sold today and that comparables 2 and 3 would sell for 4 percent more if sold today. The subject property is located in Huntington, as is comparable 1. However, comparables 2 and 3 are located in Kensington and Millhoper, respectively. 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 percent price premium relative to similar homes in Huntington. 

In these neighborhoods, an incremental square foot of lot size or living area is worth about $20 per square foot and $80 per square foot respectively. Each year of effective age reduces the value of properties in this market by about $3,000 per year. You experience suggests that each additional half-bath is worth $500; each additional full bath $1,000. Additional garage spaces, wood decks, and pools in these neighborhoods are worth $8,000, $1,000, and $12,000, 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. What is the final adjusted price (indication of the subject's value) for comparable 1, 2, and 3? 

Sales Comparison Approach: Market Data Grid for 4632 NW 56th Drive Comp Comp Comp Elements of Comparis on Sale price of comparable Subject Sale 1 Sale 2 Sale 3 $510,000 $525,000 $499,000 Transaction characteristics Property rights conveyed Financing terms Fee simple Same Same Same Conventinal Same Same Same Conditions of sale Arm's length Same Same Same Expenditur es immed. after purchase $3,000 None None 6 mos. Ago: Market conditions Today 3 mos. ago: 6 mos. ago: add 2% total add 4% total add 4% total Property characteristics Location Huntington Kensington Mi llhoper Huntington Physical characteristic s: 6, 662 sq. ft. Typical Site/lot size 6,700 sq. ft. Typical 6,800 sq. ft Typical 6,600 sq. ft Typical Construction quality Condition Average Average 7 years 3,920 sq. Average 8 years 3,985 sq. ft. Average 10 ye ars 3,835 sq. ft. Effective age Living area 5.5 years 3,473 sq. ft. Number of baths 3.0 baths 3.5 baths 3.0 baths 2.0 baths Garage Spaces Porch, patio, deck Fence, pool, etc. 2- car 2-car 2-car 1-car Cov porch/wood decl Cov. Porch Cov. Porch Cov. Porch Pool Pool None None Economics characteristics N.A. N.A. N.A. N.A. Use Single-family Same Same Same Non-realty components None None None None