# Learning Goal: I’m working on a finance question and need an explanation and ans

Learning Goal: I’m working on a finance question and need an explanation and answer to help me learn.LifeHome Realty is appraising a 15 year old two storey detached home with a double car garage on a 40 feet frontage lot. It has four 4 piece and one 2 piece bathrooms. It has finished basement. It has central air-conditioning, which adds \$8,000 to its value. It has a brand new gas fireplace, which cost \$6000. Its kitchen is functionally obsolete and need to be replaced. Its roof needs to be replaced. It has a pie shaped premium lot backing ravine.In analyzing the M.L.S. statistics for this area the following average house prices were obtained:1 month ago \$850,9002 months ago \$846,7004 months ago \$838,3006 months ago \$830,000Using the following comparable sales, determine the market value of the subject property:Sale #1On a 45 feet frontage lot with a double car garage sold just yesterday for \$920,000. Lots in the area cost \$6000 per front foot. Its condition and design are the same as the subject property, but location is not the ravine lot. It has a brand new kitchen and a finished basement which cost \$30,000 and \$60,000 respectively. It has a double car garage and five 4 piece bathrooms. It has a gas fireplace and air-conditioning. Its roof needs to be replaced at a cost of \$15,000.Sale #2Sold 2 month ago for \$1,020,000. It backs on to the ravine, requiring an adjustment of \$60,000. The house is on a 45 feet frontage lot with a brand new kitchen. It has a fireplace, double car garage and a new roof. It does have air-conditioning and the basement is finished. It has four 4 piece and one 2 piece bathrooms. Its condition and design are superior to the subject property requiring an adjustment of \$30,000.Sale #3This house is on a 50 feet frontage lot. It was sold 3 months ago for \$980,000. Its condition is superior to the subject property requiring an adjustment of \$25,000. Its location and design are similar to the subject property. It has air-conditioning but no fireplace. It has a double car garage and the finished basement. Its roof needs replacement. Its kitchen is functionally obsolete. It has three 4-piece and one 2-piece bathroom. An additional 4-piece bathroom adds \$10,000 and a 2- piece adds \$6000 to the value of the house.