Property ValuationIntermediateAlabama Exam

The 'sales comparison approach' to property valuation is MOST appropriate for:

ASpecial-use properties like churches

BIncome-producing commercial properties

CResidential properties where comparable sales data is availableCorrect

DNewly constructed properties with no comparable sales, in general

Why Residential properties where comparable sales data is available Is Correct

Answer C: Residential properties where comparable sales data is available

The sales comparison approach is most reliable for residential properties where an active market provides recent, comparable sales. It compares the subject property to similar properties that have recently sold, adjusting for differences.

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.