You have been asked to do a market analysis for John and Jane Smith who live at 3990 Valley

View
Drive. They live in a two-story brick home which is 12 years old, about the same age as most of the
homes in the subdivision, since they were all built by a single developer at about the same time.
They purchased the property three years ago for $92,000 and have a non -assumable mortgage with a
balance of $67,000 at an interest rate of 9%. As you look the property over, you note that the home
is well cared for, and no major repairs are needed. The home has a separate living room and dining
room, a small family room with a fir eplace, a kitchen, and three bedrooms. There are two full
bathrooms upstairs and a half bath downstairs. There is a two -car garage, but the area above the
garage is not tall enough for a "bonus" room, so it is used for attic storage. While you are looki ng at
the house, the Smiths point out that they have replaced the original gas central heating and air
conditioning units with electric units. There is adequate storage in the attic above the garage, but
there is no basement. The seller's existing mortga ge is not assumable, but the seller will consider
paying part of the closing costs and points on a new conventional loan.

In looking at the records available and driving through the neighborhood, you find that there have
not been many sales recently, but you do find that four houses have sold in the neighborhood in the
last six months. These homes are described below.

This home is similar in appearance on the outside to the subject property. It is also a two -story
brick home with a two-car garage. Unlike the subject property, however, it is located on a sloping
lot and has a basement. The den is on the back side of the house which has no fireplace due to the
slope of the lot. Like the subject property, it has 3 bedrooms and 2 b aths and does not have a
bonus room over the garage. All appliances are electric. This house sold after 40 days on the market
for $3000 less than the listing price of $95,000, with the buyers obtaining a new 80% conventional
loan.

The second property is not as similar in appearance on the outside to the subject property and has a
number of other differences. It is a two -story house of brick frame construction and has a two -car
garage. It is larger overall and has 4 bedrooms and 3 baths, with the master bedroom and bath
downstairs. There is also a bonus room over the garage. It has a fireplace in both the den and the
master bedroom and central heat and air conditioning which are electric. Like the subject property,
it is built on a flat lot and has no basement. This house was listed for $102,500 and sold in 22 days
for full price. The buyers made a down payment of $10,000, assumed the seller's existing mortgage,
and took a purchase money mortgage of $15,000 from the seller.

The third property is located at the end of a cul -de-sac on a flat lot. It is a ranch -style house of
brick and frame construction that has 3 bedrooms and 2 baths. It is a much smaller house than the
subject property and does not have a garage or basement. It was listed for $79,000 and sold after
being on the market for 96 days for $72,000 with VA financing.
The last property is just down the street from the subj ect property on Valley View Drive. Although
the house looks different on the outside, the floor plan is almost identical to the subject property.
It has 3 bedrooms and 2 baths, as well as a two -car garage. About the only significant difference
seen in this house and the subject property is that it does not have a fireplace in the den. The
listing price on the home was $92,000, but it sold in 46 days at $89,500. The buyer obtained a new
80% conventional loan, and the seller paid 2% of the loan amount t oward closing costs and points.

In completing the market analysis for the subject property, assume that you have received a
breakdown of values of features for this price range that includes the following information:

two-car garage $2000

basement $3000
fireplace $1000
gas heat $500
additional bedroom $4000
bonus room $2000
extra bath $1500

After considering the similarity of these properties to the subject property, you decide to weight
them as follows:

1612 Valley View Lane 30%

296 Valley View Circle 20%
463 Valley View Court 0%
4220 Valley View Drive 50%