What is the maximum price that could pay for a home

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Problem 1: Suppose that an appraiser has come to the following conclusions in evaluating the subject property. Due to the dramatic shift in the perceived safety of the neighborhood, values of any residential properties in the area of the subject property have fallen by $85,000, on average. Due to the subject property's age, physical deterioration to the building accounts for an estimate of $65,000 in lost value. An evaluation of the floor plan reveals that it is quite obsolete relative to current home buyer preferences.This has a detrimental effect on the value of the property that is estimated to be approximately $25,000. Based on your understanding of adjustments related to accrued depreciation, which of the following pertains to the adjustment for external obsolescence?

Problem 2: Suppose you plan to put a 20% down payment on a house and obtain amortgage loan that is less than the GSE size limit on conforming loans ($726,525in NewYorkCity) to finance the remainder of the purchase. Based on your understanding of the loan-to-value ratio, what is the maximum price that you could pay for a home with these restrictions in mind?

Reference no: EM132506575

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