Real Estate Interview Case Study: Valuing a $1.8M Home — What Interns Should Know

Struggling with real estate case assessments? Practice this mock valuation of a $1.8M French home and walk into interviews confident.

Interviewers expect speed, structure, and defensible assumptions. This hands-on mock case walks interns through a full valuation — comps analysis, income approach, cost approach and a simple DCF — using three French coastal/suburban examples from late 2025–early 2026. You’ll get real data points, Excel-ready formulas, and exact talking points to use in a 10–20 minute case assessment.

The assignment (what interviewers will ask)

“Quickly value this $1.8M home in Sète for a private investor. Show your process and give a recommended price and key sensitivities.” They want a defensible range, not a single number plucked from thin air.

Objective

• Produce a credible market value for the subject property (expressed in USD and EUR)
• Show three valuation methods and reconcile to a final range
• Highlight risks, assumptions, and a basic sensitivity analysis

2026 market context — what to mention up-front

Start by anchoring your valuation in the macro environment. In interviews in early 2026 you should mention:

• Interest rates: After 2024–2025 hikes, Euro-area mortgage costs have moderated but remain above pre-2022 levels. This pushes required yields down slightly from peak but keeps cap rates compressed in high-demand coastal markets.
• Demand drivers: Remote and hybrid work continues to support coastal lifestyle markets in southern France (Montpellier, Sète). Year-round demand for second homes remains resilient.
• Regulation: Post‑2023/24 short‑term rental regulation tightened in many French cities; permits and local registration matter for rental-income forecasts.
• ESG and retrofit value: Energy Performance Certificate (DPE) ratings materially affect price and rental prospects; buyers increasingly discount poor DPE scores.

Subject property: the $1.8M home (case data)

Use the Sète property as your subject. Interviewers like when you use specific numbers rather than vague descriptions.

• Listing price: $1.86M (source listing; treat $1.8M as negotiation anchor)
• Size: 1,485 sq ft
• Built / renovated: 1950, fully renovated 2019
• Rooms / beds: 4 bedrooms, designer finishes
• Features: Sea views, two levels, short walk to train station (TGV to Montpellier/Paris), interior-designer finish
• Price / sq ft: $1,250 / sq ft (as advertised)
• Lot size: 3,200 sq ft (approx.) — useful for lot adjustments

Comparable sales (mock dataset to use during the interview)

Compile a short comp table — interviewers expect quick math, not ten pages. Here are three plausible comps you can use and adjust in real time.

Comp A — Sète renovated house (closed)

• Sale price: $1.78M
• Size: 1,350 sq ft
• Price / sq ft: $1,319
• Notes: Renovated 2018, similar sea views, smaller lot, no designer finish

Comp B — Montpellier historic center apartment (closed)

• Sale price: $1.72M
• Size: 1,650 sq ft
• Price / sq ft: $1,042
• Notes: Prime city center location, no sea view, higher floors, protected building status (limits alterations)

Comp C — Country-style villa near Montpellier (closed)

• Sale price: $1.95M
• Size: 2,100 sq ft
• Price / sq ft: $929
• Notes: Large lot, pool, more land value but less coastal demand

Interview tip: Quickly explain why each comp is relevant: proximity, date of sale (prefer within 12 months), upgrades, views, and legal constraints.

Valuation method 1 — Comparable sales (the market approach)

Use a simple unit-rate approach and adjust for material differences. Keep your math transparent.

Step-by-step comps approach

1. Calculate raw price / sq ft for each comp (done above).
2. Adjust for size, view, finish, lot, and date. Use percentage adjustments: view +8–12%, designer finish +5–8%, lot +3–5%, size differences using a price curve (-3% per 100 sq ft over a baseline).
3. Apply adjustments to derive an adjusted price per sq ft, then multiply by subject area (1,485 sq ft).

Example adjustments (interview-ready, show the math):

• Comp A: base $1,319/sq ft; adjust -5% for smaller size, +7% for similar view, +6% for finish → net +8% → adjusted = $1,425/sq ft → implied = $2.12M (high)
• Comp B: base $1,042/sq ft; adjust +2% for city premium but -10% for no view and -3% for stricter building regs → net -11% → adjusted = $927/sq ft → implied = $1.38M (low)
• Comp C: base $929/sq ft; adjust +4% for larger lot value but -6% for inland location (no sea view) → net -2% → adjusted = $911/sq ft → implied = $1.35M (low)

Takeaway: raw comps produce a spread. Reconcile by weighting: weight Comp A 50% (most like subject), Comp B 25%, Comp C 25%. Weighted comps value ~ $1.92M. Round to a market approach estimate of $1.85–$1.95M.

Valuation method 2 — Income approach (direct capitalization)

Useful if the investor plans to rent or reposition. Provide a conservative long-term rental scenario and an alternative short-term rental scenario (Airbnb-style) but note local rules.

Long-term rental (steady-state)

• Estimated monthly rent (long-term furnished): $4,200 (Sète high-end, 2026)
• Gross annual rent: $50,400
• Operating expenses (incl. tax, maintenance, management): 30% → Effective gross income = $35,280
• Net Operating Income (NOI): $35,280
• Cap rate assumption (2026 coastal market): 3.5%–4.5% (use 4.0% as base)
• Value = NOI / cap rate = $35,280 / 0.04 = $882,000 (long-term rental value — not aligned with residential sale price, indicates highest-and-best-use matters)

Short-term rental (furnished seasonal)

• Average daily rate (ADR): $320/night (designer property, sea view)
• Occupancy: 60% (seasonal coastal variability)
• Gross annual revenue: $320 * 365 * 0.60 = $70,080
• Operating expenses: 45% (higher for turnover, cleaning, agency fees, utilities) → NOI = $38,544
• Apply a higher cap rate to reflect higher operational risk: 5.0%
• Value = $38,544 / 0.05 = $770,880

Interpretation: For private residential sales, income approaches often understate market prices for owner-occupied specialties. In interviews, explain why: owner-occupiers pay a premium for location, finish and lifestyle value that rents don’t capture.

Valuation method 3 — Cost approach (replacement cost less depreciation)

Use this as a sanity check, especially for unique features.

• Replacement cost new (construction + permit + landscaping): assume $300/sq ft → 1,485 * $300 = $445,500
• Site value (land premium near sea): $700,000
• Total replacement cost = $1,145,500
• Depreciation for a 1950 structure (renovated 2019) — assume 10% functional /80 years life → value after depreciation = $1,030,950

Cost approach implies ~ $1.03M. Again, cost rarely captures market premiums for location and intangible desirability.

DCF (5-year) — a quick investor model

Present a concise DCF if asked. Interviewers expect you to communicate assumptions cleanly; they don’t need a full model on paper.

Assumptions (base case)

• Year 1 NOI: $36,000 (blended long-term / short-term mix)
• NOI growth: 2% annually (conservative)
• Holding period: 5 years
• Discount rate (investor required return): 7.5%
• Terminal cap rate: 4.5%

Formula highlights (speak these in the interview)

• Year t cash flow = NOI_t (no leverage)
• Terminal value = NOI_year5 / terminal cap rate
• NPV = sum of discounted NOIs + discounted terminal value

Quick run-through (rounded): Year 1 NOI $36k, Y2 $36.7k, Y3 $37.4k, Y4 $38.2k, Y5 $38.9k. Terminal = $38.9k / 0.045 = $864k. Discounted PV (5 years at 7.5%) ~ $620k (NOIs) + $605k (terminal PV) = $1.225M.

Conclusion: DCF gives ~$1.2M — again showing that pure income buyers would pay less than owner-occupiers. This underscores the importance of choosing the correct approach based on buyer type.

Reconciling the methods — produce your final range

List the method outputs side-by-side and explain weights.

• Comparable sales: $1.85–$1.95M (weighted estimate $1.90M)
• Income approach: $0.77–$0.88M (depending on use)
• Cost approach: $1.03M
• DCF: ~$1.22M

Decision logic to present: The market approach should carry the most weight for a unique, owner-occupied coastal home. Income and cost approaches serve as lower-bound checks. After reconciling, present a final opinion of $1.78M–$1.92M, with a recommended listing bid of $1.85M (near current listing of $1.86M, leaving room for negotiation).

Key sensitivities and what to show the interviewer

Be ready to run quick sensitivity checks live:

• Price / sq ft ±5% → value moves about ±$93k
• Cap rate ±0.25% in income approach → large % swings (highlight for investor buyers)
• ADR / occupancy ±10% in short-term scenario → significant NOI swings
• DPE upgrade required? If retrofit needed ($40k–$80k) subtract from final value

Interview strategy and presentation tips

How you communicate matters as much as your numbers.

• Structure your answer: 1) State your objective, 2) give a top-line estimate and range, 3) explain the three approaches, 4) reconcile and state a recommendation, 5) state key sensitivities.
• Ask clarifying questions: Is the buyer an owner-occupier or investor? Is short-term rental allowed? Time horizon?
• Be transparent about assumptions: Always state your currency and exchange rate (e.g., 1 EUR = 1.08 USD as of Jan 2026), cap rate rationale, and occupancy assumptions.
• Use visuals: If allowed, sketch a 2x2 showing market vs. income buyers, then show final range visually.
• Time management: For a 15-minute case, spend ~5 mins on comps & assumptions, 5 mins on calculations, and 5 mins on reconciliation and risks.

“Interviewers hire process, not perfect numbers.” — Use the valuation to show your logical framework and practical judgment.

Practical deliverables: what to hand in or say at the end

• One-slide summary: top-line value, primary drivers, 3‑point range, and one key recommendation (e.g., pursue at $1.85M, require DPE grade B or retrofit allowance).
• Appendix: short comp table and quick DCF assumptions
• Offer language template (if private client): “Based on market evidence and adjustments, we recommend an initial offer of $1.85M subject to standard inspections and DPE verification.”

Excel model checklist — build this in under 30 minutes

Create a one-sheet model with these labeled blocks. Interviewers will appreciate an orderly workbook.

1. Inputs: subject sq ft, comps (price, sq ft, date), ADR/occupancy, cap rates, discount rate, exchange rate, DPE notes.
2. Comps calc: base $/sq ft, % adjustments, adjusted $/sq ft, implied price.
3. Income calc: rent schedules, expenses, NOI, cap rate valuation.
4. DCF: 5-year NOI row, discount factors, terminal value.
5. Summary: table of method outputs + weighted final value.

Formula tips: use simple formulas so reviewers can trace your work: e.g., =B2*B3 for implied price or =NOI/cap_rate for direct cap valuation. If you want a quick checklist of output labels and slide text, see a fast template for tight client decks at rapid one-page templates.

Common interviewer traps — and how to avoid them

• Don’t ignore regulation. If short-term rental is restricted in that municipality, explain the impact and pivot to owner-occupier rationale.
• Avoid over-precision. Round sensibly and explain why you rounded (data uncertainty).
• Don’t conflate list price with market value — use comparable closed sales when possible.
• Be ready to defend high-level assumptions (why 4% cap rate? why 60% occupancy?).

Practice exercise (homework for the interview)

Replicate the model above with these variations and time yourself:

1. Reduce occupancy by 10% and re-run income & DCF (10 minute drill)
2. Swap cap rate +0.5% and show impact on valuation (5 minute drill)
3. Assume an energy retrofit cost of $60k — adjust cost & final recommendation (7 minute drill)

Final thoughts — how this prepares you for real interviews in 2026

Interview case studies in 2026 emphasize speed, defensible assumptions, and market context (interest rates, rental regulation, ESG). By rehearsing this $1.8M French home case you’ll practice:

• Telling a clear valuation story that matches buyer type
• Using multiple methods and reconciling differences
• Running quick sensitivity checks on key variables
• Communicating risks like DPE, short-term rental rules, and interest rate volatility

Call to action

Want the Excel template and one-page slide example used in this mock case? Download the free internship-ready valuation kit at internships.live/real-estate-kits and practice the three timed drills above before your next interview. Sign up for a mock interview and get 30 minutes of personalized feedback from a real estate analyst — spots fill fast for the 2026 interview season.

Related Reading

• The Ethical Photographer’s Guide to Documenting Properties
• Review: Refurbished Cameras for Property Photos
• Tiny Tech, Big Impact: Field Guide to Gear for Open Houses & Pop‑Ups
• Best CRMs for Managing Client Leads & Offers
• Lighting That Remembers: Design & Staging Tips
• How to 3D Print a Personalized Training Wheel Mount (Step-by-Step for Parents)
• Mental Health for Moderators and Creators: Avoiding Secondary Trauma When Working with Disturbing Content
• How to Run a Successful Live Podcast Launch (What Ant & Dec Got Right and Wrong)
• Meet the Contributors: The LibreOffice Features That Replaced Our Need for Copilot
• Jedi Strength: A Star Wars–Inspired Yoga Strength Series for Athletes