a) A valuer estimated the value of a house 827,500 with the use of Cost Method. The house is located in a residential area with 140% density and recently erected. The replacement cost is given from the quantity surveyor and the land value is estimated based on comparable transactions from sales of vacant land plots in the vicinity. Do you agree with this approach? What might be wrong? Land Value 550 sq.m. x 800 €/sq.m. = € 440,000 Replacement Cost 250 sq.m. x 1550 €/sq.m. = € 387,500 Market Value € 827,500

a) A valuer estimated the value of a house 827,500 with the use of Cost Method. The house is located in a residential area with 140% density and recently erected. The replacement cost is given from the quantity surveyor and the land value is estimated based on comparable transactions from sales of vacant land plots in the vicinity. Do you agree with this approach? What might be wrong? Land Value 550 sq.m. x 800 €/sq.m. = € 440,000 Replacement Cost 250 sq.m. x 1550 €/sq.m. = € 387,500 Market Value € 827,500

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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you are pricing a property and found four suitable comparables (I,II,III and IV) with the following adjusted sales prices I. 127,000 II. 131,000 III. 133,000 IV. 128,000 In your opinion, property II was the most similar to you decided to "weoght" it with 60% of the total value estimate. accordingly you decide to "weight" property I with 20%. Properties II and IV were least like the subject property and you gave them each 10% for a total of 100%. what is your estimate of what the property is worth? A. 129,750 B. 131,000 C. 133,000 D. 130,100
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You are conducting an appraisal using the comparison method. You have found two comparable properties with the same square footage and parcel area. The selling price of Property 1014 was 10% less than Property 2056. Both comparables (property being appraised) are in the same neighborhood. Which notation in the appraiser's report could contribute to this difference in selling price. (Hint: Of the factors listed, which would contribute to the greatest difference between the value of the two properities). Utility bills of Property 1014 are 3% less than Property 2056 Property 1014 was built in 1986 and Property 2056 was built in 1988. Property 1014 sold during the winter months when there are generally few buyers in the market Property 1014 has had a recent kitchen renovation Property 1014 is closer to the regional hospital by 1.5 miles
a buyer purchased a home using a va loan. an appraiser was assigned to estimate the value of the property for the lender. the appraised value was less than the contract price. if the buyer really wants the property which of the following choices is the buyers best option do nothing because the seller must sell the property at the appraised value Hire an appraiser and see if a second appraisal yields a higher appraised value seek an fha lender who will automatically make up the difference between the contract price and the appraised value make up the difference between the contract price and appraised value in cash
You’re called out of an investment committee meeting at your real estate company for an important phone call. Stepping back into the meeting you find you’ve missed the initial description of the Subject Property, but a heated debate on which Comparable Properties should be used to evaluate the property is underway. Glancing at a handout your analysts have prepared, you see observe the following table: Comp A Comp B Comp C Comp D Comp E Distance from Subject 0.50 Miles 0.75 miles 1 mile 0.25 miles 0.90 miles Year of Construction 1990 2005 1985 2015 2006 Sq. Ft. 14,000 SF 24,000 SF 10,000 SF 25,000 SF 37,000 SF Months Since Sale 3 months 9 months 12 months 4 months 2 months
Suppose you have 3 sales you can use for comparable sales. Sale 1 and Sale 2 are puritan in relation to land class. Use the puritan sales to determine the price per acre by land class for the third sale using the land class ratio analysis and land adjustment process. Sale 1 has 475 acres of Class 1V land and sold for $300,000. Sale 2 has 600 acres of Class I land and sold for $550,000. Sale 3 has 350 acres of Class I land and 100 acres of Class IV land and sold for $400,000.
Refer to the highest and best use analysis in table below. Use (a)Year 1 NOI (b)(r−g) (c)R (a÷c = d)Implied Property Value (PV) (e)Construction Cost of Building (d) − (e)Implied Land Value(Residual) Office $ 510,000 0.13−0.03 0.10 $ 5,100,000 $ 4,000,000 1,100,000 Retail $ 610,000 0.12−0.04 0.08 7,625,000 $ 6,750,000 875,000 Apartment $ 415,000 0.12−0.03 0.09 4,611,111 $ 3,000,000 1,611,111 Warehouse $ 410,000 0.10−0.02 0.08 5,125,000 $ 4,000,000 1,125,000 Required: Suppose that the warehouse income would grow at 3 percent per year instead of 2 percent. a. Does this change the highest and best use of the site? multiple choice Yes No b. What is the new implied land value? (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)

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