Property Valuation
An Alaska appraiser who determines a comparable is 'physically inferior' to the subject property will make which adjustment?
AA negative adjustment to the comparable's price
BA positive adjustment to the comparable's price to account for the physical difference✓ Correct
CNo adjustment — physical condition differences are ignored
DA negative adjustment to the subject's value
Explanation
If the comparable is physically inferior to the subject, it sold for less than the subject would have sold for (all else equal). A positive adjustment is added to the comparable's price to bring it up to the subject's equivalent.
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Key Terms to Know
Comparable Sales (Comps)
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.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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