Property Valuation
In Alaska, a 'drive-by appraisal' (exterior-only) is distinguished from a full appraisal because it:
AUses only the cost approach to value
BDoes not include an interior inspection of the property✓ Correct
CIs performed by a real estate agent rather than a certified appraiser
DOnly applies to vacant land
Explanation
A drive-by or exterior-only appraisal involves viewing the property from the street without an interior inspection. It is less comprehensive than a full appraisal but may be used for refinances of lower-risk properties.
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Key Terms to Know
Appraisal
A 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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market 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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