In Alaska, the 'allocation method' of land valuation estimates land value by:
Why Separating the total property sale price into land and building components using a typical land-to-total value ratio Is Correct
Answer B: Separating the total property sale price into land and building components using a typical land-to-total value ratio
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.
Key Property Valuation Terms in This Question
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Key Terms to Know
Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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.
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