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A comparable property with 1,800 SF of gross living area just sold for $280,000. Another comparable...

A comparable property with 1,800 SF of gross living area just sold for $280,000. Another comparable with 1,600 SF sold for $272,000. What would a 1,480 SF house sell for, assuming that the marginal change in square footage has the same impact on value as between the two comparables ?

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Answer #1

Marginal change in square footage = Changes in total sales proceed / Changes in square feet sold

After comparing , comparable properties  with 1,800 SF and 1,600 SF, we can get marginal change in square footage, which is shown below:

Marginal change in square footage = [$ 280,000 - $ 272,000] / [ 1,800 - 1,600] square feet

Marginal change in square footage = $ 8,000/ 200 square feet

Marginal change in square footage = $ 40

If, another house of 1,480 SF sold, then selling price or sales proceed would be = Sales proceed of 1,600 SF house - [ Reduction in SF X Marginal change in square footage ]

Net sales proceed = Sales proceed of 1,600 SF house - [ ( 1,600 - 1,480) X $ 40 ]

Net Sales proceed = $ 272,000 - $ 4,800 = $ 267,200

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