California Real Estate Practice Exam

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A home built in 1959 cost $14,500. The home is 32' x 48' and the attached garage is 18' x 20'. In 1983, the cost per square foot factors were $75 (house) and $15 (garage). If the improvement depreciated at 2% per year and the land value of the lot had risen to $25,000, what was the value of the property in 1983?

$81,258
$84,367
$87,531
$87,712

The correct answer is: $81,258

To determine the value of the property in 1983, we first need to calculate the improvements, which include both the house and the garage, and their respective depreciated values by then. 1. **Calculate the Square Footage:** - For the house: 32 feet x 48 feet = 1,536 square feet. - For the garage: 18 feet x 20 feet = 360 square feet. 2. **Total Square Footage of Improvements:** - Total square footage = 1,536 + 360 = 1,896 square feet. 3. **Calculate the Original Cost of Improvements:** - The original cost of the house was $14,500. - The total square footage was 1,896 square feet. - The average cost per square foot at the time of purchase can be calculated as $14,500 / 1,896 ≈ $7.65. However, we'll use the given cost per square foot for both improvements in 1983. 4. **Calculate the Current Value of Each Improvement:** - For the house, in 1983: 1,536 sq ft x $75/sq ft = $115,