Residential Sales Comparison and Income Approach

Module 7 Case Study

Subject Property Data
Review the following subject property, neighborhood, site, plot plan improvement, and cost
approach data.

The subject of this case study is a typical property that would be found in many cities around
the United States. The data presented in this case study will allow you to complete the sales
comparison approach to valuation for this property.

Subject address 1254 Scottish Terrier Lane

Legal description Lot 32, Dog Pound Addition
School system Smallburg Public Schools
Town Smallburg
Township Granite
County Hancock
Taxes $2,711/half year
Borrower Jack Russell
Current owner of record Jack Russell
Property rights appraised fee simple
Homeowners association $120 per year to the Dog Pound Homeowners
Association
Client Slopay Mortgage Company
PO Box 33
Smallburg, 44444
Subject sales history:

1. Sold 60 months ago at $450,000 with a $360,000 first mortgage and a $67,500
second mortgage. Buyer was a mortgage broker who bought the property with
a $22,500 down payment.
2. Sold 24 months ago for $470,000 to a local real estate broker with cash
payment. This home was on the market and listed in the MLS for 60 days at
$499,000. The price was lowered to $489,000, then to $479,500. It sold for
$470,000 after a total of nine months on the market and in the MLS system.
The owners moved and left the house vacant four months after the house was
listed.
3. The property has not been on the market since the sale described above.
Neighborhood Data

Boundaries east ¼ of Granite Township in Hancock County

Location suburban, medium density
Built up over 75%
Growth rate little construction in area
Property values increasing 3% per year
Supply/demand in balance
Marketing time 30-60 days if priced correctly
Predominant occupancy single-unit residences
Neighborhood SUR price
$300,000-$785,000 (predominantly $500,000)
range
Neighborhood SUR age
0–15 years (predominantly 10 years)
range
Neighborhood rental $0—virtually no rental units in this market and buyers do not buy
range based on income rates
Price/rental change N/A
80% single-unit residential (SUR)
0% 2-4 unit
Present land use 10% church, school, or municipal
5% vacant or agricultural
5% commercial
Land use change vacant to residential likely
2—12-year-old, single-unit homes active listings = 7
located in east ¼ of Granite township, pending sales = 2
Market competition
Hancock County, priced from closed sales in last 12
$450,000 to $550,000 months = 14
Site Data
Lot size 33,115 sq. ft. = 0.80 acres
Zoning residential R-1 (conforming)
View residential – residential
Topography 3-4' above the street
• public water and sewer
• stockholder-owner public electric company
• telephone
Utilities
• natural gas
• cable TV

Highest and best use (as vacant) residential single-unit (zoning is very restrictive)
• 30' paved public asphalt, sidewalks, curbs
and gutters
Street access
• on-street parking allowed

Street lights — alley none none

Drainage highgood drainage
Landscaping — driveway commensurate with price concrete
FEMA zone "X" 180000-0000C (6/04)
Easements no adverse easements or encroachments
Plot Plan
Subject Improvement Data
detached, 1-unit, 2-story residence with 3-car attached
Improvement type
garage and partial finished basement
Improvement age 7 years actual age, 7 years effective age
Foundation poured concrete 10" walls
Roof type 10/12 pitch, asphalt shingles
Construction 2" x 4" wood frame
Veneer brick and wood siding
Gutters & downspouts continuous aluminum
Window type wood frame, thermo pane
Construction quality average as compared to homes in this price range
Improvement condition average for homes of this age in this market
Story/style 2-story traditional design
Above-grade room count 10 rooms — 4 bedrooms, 3 ½ baths
• four bedrooms on 2nd floor
Configuration • common areas and ½ bath on 1st floor

Above-grade area 3,351 sq. ft.

Basement area 1,448 sq. ft. basement, concrete walls and floor
1,300 sq. ft. finished with drywall ceilings and walls,
Basement finished area wall-to-wall carpet with pad, windows in bedrooms and
family room (adequate for egress in case of fire)
Basement partitioning recreation room 1 full bath
1 bedroom small mechanical room
Garage (3-car attached) 859 sq. ft. frame construction, concrete slab floor
HVAC/condition GFA/central AC/average
Appliances Range/oven Microwave
Dishwasher Jennair cook island
Disposal
Fireplace 2 gas units (1 electronic spark, 1 with match light)
Porches, patios rear wood deck and enclosed porch
ceramic tile in foyer and hallways, hardwood in kitchen
Floors
and hearth room, carpets in living room and bedrooms
Walls drywall on all walls
Trim/finish colonial wood/painted/average
Bath floor/wainscoting ceramic tile ceramic tile
Doors 6 panel, wood hinged with metal hardware
Attic Over main part of residence, not floored
Highest and best use as improved as currently improved
Cost Approach Data
NOTE: You are not completing a cost approach for this case study property. The following
information may be used for supporting some of the adjustments.

$99.75/sq. ft. above grade

$21.00/sq. ft. basement
$23.00/sq. ft. basement finish
Current construction cost (reproduction)
$23.00/sq. ft. garage
$4,500 stoop and deck
$6,000 for enclosed porch
Site value $100,000
Depreciation 10% total (all forms of depreciation)
Site improvements = $24,000 net value

Suggestions

• Use the depreciated cost technique to extract adjustments for basement area (square
feet) and enclosed porch.
• Use paired sale data analysis extraction for all other adjustments.
Subject Property Summary
Briefly describe the following features of the subject property.
Location (density, location, appeal) of suburban—medium to low density, broad
neighborhood appeal to the market
Property values increasing by 3% per year
Market segment—price $300,000 – $785,000 (predominantly
$500,000)
Market segment—demographic Would probably appeal to buyers with large
families. While it is important to know what
the subject’s market segment is, you cannot
discuss who lives in this neighborhood unless
this discussion complies with fair housing laws.
Market segment—age of home 0 – 15 years (predominantly 10 years)
Market segment—quality of home fairly nice—average for this price range
Market segment—lot size this market would probably want a smaller lot
Market segment—# of homes buyer has probably 2 or 3, not a first-time buyer
owned before
Market segment supply and demand 2-10 year old single-unit homes located in east
¼ of Granite township, Hancock County, priced
from $450,000 to $550,000, appears in balance
active listings = 7
pending sales = 2
closed sales in the last 12 months = 14
Site issues a little larger than some but not much
Floor plan issues none
Condition average for this market
Quality average for this market
House size typical
Basement size seems in line with market, maybe a little small
Garage size appears adequate, 4-car attached
Comparable Sales
The following pages list six comparable sales available from known sources in the subject
property's market. The data is not perfect, but it is better than the data available for many real-
world assignments. These sales are all in the same tax and school districts as the subject
property. There are no other comparable sales available in the subject's market.

The assignment is to value the subject property and support all the adjustments made to all the
comparable sales. Use all six comparable sales. Use any tool thought to be applicable to support
the adjustment, but keep in mind that intuition and guessing are not encouraged. Your ability
to supply support for all adjustments is as important as the number itself. Assume a 3%
increase in property values each year on a straight-line basis.
Comparable Sale 1
(Data from MLS system #456789)

Address 1251 Scottish Terrier Lane, Smallburg

Proximity across the street from subject
School system Smallburg Public Schools
Town Smallburg
Taxes $5,200/year
List price $529,900
Sale price $498,000
Date of sale 3 months ago
Financing cash to seller, no concessions
Days on market 40

Improvement age 3 years actual, 3 years effective

Lot size 0.6 acres
Topography level—adequate drainage
Utilities all public available
Construction wood frame 2" x 4" studs, 16" O.C.
Veneer brick/wood siding
Construction quality average for this market and price range
Improvement condition average for this market and price range
Story/style 2 story/traditional
Room count 10 rooms—4 bedrooms, 3 ½ baths
Configuration common areas on 1st floor, bedrooms and baths on 2nd floor
Above-grade area 3,388 sq. ft.
Basement area 1,500 sq. ft. with windows and 1,300 sq. ft. finished
Garage 3-car detached garage (800 sq. ft.)
HVAC gas forced air with central Freon-based air conditioner
Appliances range/oven, dishwasher, disposal
Fireplace 2—gas fired
 Porches, patios, pools, etc. enclosed rear porch, rear wood deck

Additional notes. This property is improved with a 2-story, 4-bedroom home with an attached
garage. The design is found all over Smallburg and is very much like the subject property's
design.
Comparable Sale 2
(Data from MLS system #119249)

Address 1256 Scottish Terrier Lane, Smallburg

Proximity same street, 3 lots north from the subject
School system Smallburg Public Schools
Town Smallburg
Taxes $4,500/year
List price $469,000
Sale price $460,000
Date of sale 6 months ago
Financing conventional mortgage, no concessions
Days on market 90 days

Improvement age 11 years actual, 11 years effective

Lot size 0.6 acres
Topography level—adequate drainage
Utilities all public available
Construction wood frame 2" x 4" studs, 16" O.C.
Veneer brick/wood siding
Construction quality average for this market and price range
Improvement condition average for this market and price range
Story/style 2 story/traditional
Room count 10 rooms—4 bedrooms, 3 ½ baths
all common areas on 1st floor, bedrooms and 3 baths on 2nd
Configuration
floor
Above-grade area 3,400 sq. ft.
Basement area 1,500 sq. ft. with windows and 1,400 sq. ft. finished
Garage 3-car detached garage (800 sq. ft.)
HVAC gas forced air with central Freon-based air conditioner
Appliances range/oven, dishwasher, disposal
Fireplace 2—gas fired
Porches, patios, pools, etc. deck, enclosed porch

Additional notes. This property is also a common 2-story design very much like the subject
property.
Comparable Sale 3
(Data from MLS system #582987)

Address 1259 Cocker Spaniel Drive, Smallburg

Proximity same platted addition, next street over from subject
School system Smallburg Public Schools
Town Smallburg
Taxes $5,300/year
List price $549,000
Sale price $535,000
Date of sale 7 months ago
Financing conventional mortgage, 4 points paid by seller on 90% loan
Days on market 160

Improvement age 3 years actual, 3 years effective

Lot size 0.8 acres
Topography level—adequate drainage
Utilities all public available
Construction wood frame 2" x 4" studs, 16" O.C.
Veneer brick/wood siding
Construction quality average for this market and price range
Improvement condition average for this market and price range
Story/style 2 story/traditional
Room count 10 rooms—4 bedrooms and 3 ½ baths
all common areas on first floor, bedrooms and bathrooms on
Configuration
second floor
Above-grade area 3,400 sq. ft.
Basement area 1,500 sq. ft. with windows and 1,425 sq. ft. finished
Garage 3-car detached garage (900 sq. ft.)
HVAC gas forced air with central Freon-based air conditioner
Appliances range/oven, dishwasher, disposal
Fireplace 2—gas fired
Porches, patios, pools, etc. enclosed porch and rear deck

Additional notes. A very popular full 2-story home with 4 bedrooms upstairs.
Comparable Sale 4
(Data from MLS system #875895)

Address 1257 Cocker Spaniel Drive, Smallburg

Proximity same platted addition, next street over from subject
School system Smallburg Public Schools
Town Smallburg
Taxes $4,700/year
List price $605,000
Sale price $591,200
Date of sale 9 months ago
Financing conventional mortgage, no concessions
Days on market 210

Improvement age new home

Lot size 0.75 acres—adjacent to golf course
Topography level—adequate drainage
Utilities all public available
Construction wood frame 2" x 4" studs, 16" O.C.
Veneer brick/wood siding
Construction quality average for this market and price range
Improvement condition average for this market and price range
Story/style 2 story/traditional
Room count 10 rooms—4 bedrooms, 3 ½ baths
all common areas on first floor, bedrooms and bathrooms on
Configuration
second floor
Above-grade area 3,250 sq. ft.
Basement area 1,500 sq. ft. with windows and 1,300 sq. ft. finished
Garage 3-car detached garage (700 sq. ft.)
HVAC gas forced air with central Freon-based air conditioner
Appliances range/oven, dishwasher, disposal
Fireplace 2—gas fired
Porches, patios, pools, etc. enclosed porch and rear deck

Additional notes. This was a new home at time of sale and the buyers had to do their own
landscaping work. The builder paid nothing toward materials or labor for the landscaping. The
buyer stated she paid about $15,000 for the minimal work done. This is a smaller house on a
much better lot.
Comparable Sale 5
(Data from MLS system #565656)

Address 1248 Collie Way, Smallburg

Proximity same platted addition as subject
School system Smallburg Public Schools
Town Smallburg
Taxes $4,100/year
List price $489,899
Sale price $469,000
Date of sale 16 months ago
Financing conventional mortgage, $8,000 seller-paid concessions
Days on market 100

Improvement age 3 years actual, 3 years effective

Lot size 0.6 acres
Topography level—adequate drainage
Utilities all public available
Construction wood frame 2" x 4" studs, 16" O.C.
Veneer brick/wood siding
Construction quality average for this market and price range
Improvement condition average for this market and price range
Story/style 2 story/traditional
Room count 10 rooms—4 bedrooms, 2 baths
all common areas on 1st floor, bedrooms and baths on 2nd
Configuration
floor
Above-grade area 2,850 sq. ft.
Basement area 1,500 sq. ft. with windows and 1,500 sq. ft. finished
Garage 3-car attached garage (900 sq. ft.)
HVAC gas forced air with central Freon-based air conditioner
Appliances range/oven, dishwasher, disposal
Fireplace 2—gas fired
Porches, patios, pools, etc. Enclosed porch, rear deck

Additional notes. This is an older sale of a smaller home in the same addition as the subject
property.
Comparable Sale 6
(Data from MLS system #651156)

Address 1299 Lhasa Apso Drive, Smallburg

Proximity same platted addition
School system Smallburg Public Schools
Town Smallburg
Taxes $4,200/year
List price $429,900
Sale price $425,000
Date of sale 12 months ago
Financing conventional mortgage, no concessions
Days on market 18 days

Improvement age 3 years actual, 3 years effective

Lot size 0.6 acres
Topography level—adequate drainage
Utilities all public available
Construction wood frame 2" x 4" studs, 16" O.C.
Veneer brick/wood siding
Construction quality average for this market and price range
Improvement condition average for this market and price range
Story/style 2 story/traditional
Room count 10 rooms—4 bedrooms, 3 ½ baths
Configuration common areas on 1st floor, bedrooms and baths on 2nd floor
Above-grade area 2,850 sq. ft.
Basement area 1,500 sq. ft. with windows and 0 sq. ft. finished
Garage 3-car detached garage (900 sq. ft.)
HVAC gas forced air with central Freon-based air conditioner
Appliances range/oven, dishwasher, disposal
Fireplace 2—gas fired
 Porches, patios, pools, etc. rear deck

Additional notes. This is a slightly newer home but the sale date is older than the others. This
home sold very quickly.