Cost Approach Higher Than Sales Comp

[Mountain Man]

If you had an all cash offer at $152,000, an offer with FHA financing at $158,000, and an offer with conventional financing and inspection continency for $156,000... which would one you be more likely to take? The point is real estate is not a perfect market, and values are best described as a range. The only reason we put a point number on it is for the lender's LTV.

 

[The Warrior Monk]

This is less than a 2% difference in value estimate by sales comparison and cost approaches. I'd point out that the difference is well within acceptable margins and that typically the cost approach will produce a value that will exceed or equal the sales comparison approach.

I completely agree with this line of reasoning. It's typical in my area to have an adjusted sales price range the differs from high to low by more than 2%, but this is never questioned. So why would an even smaller percentage be questioned between the two approaches???