Given the following information, determine the value of having an additional bedroom. Assume that the comparable properties are similar in all other attributes besides those listed in the table below. $\begin{array}{l|c|c|c|c}
& \text { Comparable 1 } & \text { Comparable 2 } & \text { Comparable 3 } & \text { Comparable 4 } \
\hline \text { Time Sold } & \text { Today } & \text { Year Ago } & \text { Today } & 1 \text { Year Ago } \
\hline \text { Bathrooms } & 2 & 2 & 2 & 3 \
\hline \text { Bedrooms } & 3 & 3 & 4 & 3 \
\hline \text { Sale Price } & \$ 375,000 & \$ 365,000 & \$ 380,000 & \$ 367,500
\end{array}$
A) $2,500
B) $5,000
C) $7,500
D) $10,000

Question

Given the following information, determine the value of having an additional bedroom. Assume that the comparable properties are similar in all other attributes besides those listed in the table below. $\begin{array}{l|c|c|c|c} 
& \text { Comparable 1 } & \text { Comparable 2 } & \text { Comparable 3 } & \text { Comparable 4 } \
\hline \text { Time Sold } & \text { Today } & \text { Year Ago } & \text { Today } & 1 \text { Year Ago } \
\hline \text { Bathrooms } & 2 & 2 & 2 & 3 \
\hline \text { Bedrooms } & 3 & 3 & 4 & 3 \
\hline \text { Sale Price } & \$ 375,000 & \$ 365,000 & \$ 380,000 & \$ 367,500
\end{array}$
A) $2,500
B) $5,000
C) $7,500
D) $10,000

Quizplus · Accepted Answer

The only difference between Comparable 2 and Comparable 3 is the number of bedrooms, with Comparable 3 having one additional bedroom. The sale price difference between the two properties is $15,000 (\$380,000 - \$365,000). Therefore, the value of having an additional bedroom is $15,000 divided by the difference in bedrooms, which is 1, resulting in a value of $15,000. However, we are asked for the value of having an additional bedroom, not an additional bedroom specifically in Comparable 2, so we take the average value of the additional bedroom over the two comparables that differ in this attribute (Comparable 2 and Comparable 3), which is $7,500. Therefore, the answer is B, $5,000.

Given the Following Information, Determine the Value of Having an Additional