Problem: Valuing Residential Real Estate
Sarah Fluggel is considering the purchase of a home located at 2121 Tarter Circle in Frisco, Texas. The home has 3,000 square feet of heated and cooled living area, and the current owners are asking a price of $375,000 for it.
a. Use the information provided in the following table to determine an initial estimate of the value of the home Sarah is considering:
|
|
Comp #1
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Comp #2
|
|
Sale Price
|
#240,000
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$265,000
|
|
Square footage
|
2,240
|
2,145
|
|
Selling price/sq. ft.
|
$107.14
|
$123.54
|
|
Time on the market
|
61 days
|
32 days
|
b. After making her initial estimate of the value of the home, Sarah decided to investigate whether the owner's asking price of $375,000 might be justified based on unique attributes of the home. What types of details might you recommend Sarah look for in trying to justify the price of the home?
c. What if the house Sarah is considering had an asking price of $315,000? What would you recommend Sarah do then?