In a declining market, a time adjustment to comparable sales would generally be:
Why Negative (downward) Is Correct
Answer B: Negative (downward)
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.
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Related Alabama Questions
- A comparable sale that sold 18 months ago may require a time (market conditions) adjustment because: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
- In the sales comparison approach, adjustments are made to the comparable properties to account for differences. If a comparable has a feature the subject property lacks, the adjustment to the comparable is:Property Valuation
- A capitalization rate decreasing over time in a market generally indicates:Property Valuation
Key Terms to Know
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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