Which of the following best describes an arm's length transaction used as a comparable sale?
Why A sale between unrelated parties where both are acting voluntarily in their own best interest Is Correct
Answer B: A sale between unrelated parties where both are acting voluntarily in their own best interest
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
People Also Study
Related Alabama Questions
- A comparable sale that sold 18 months ago may require a time (market conditions) adjustment because:Property Valuation
- A comparable sale used in an appraisal had a garage that the subject property lacks. The appraiser should:Property Valuation
- When market data indicates that comparable sales prices are increasing, a time adjustment to a sale from 6 months ago would be:Property Valuation
- A property manager who negotiates a lease for a commercial tenant without the owner's knowledge or authorization is acting:Property Management
- In an appraisal of an Alabama property, a positive adjustment to a comparable sale means the comparable is:Property Valuation
Key Terms to Know
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →