Property Valuation
In Alaska, the valuation of a 'partial interest' (such as a fractional ownership or minority interest) typically results in a value that is:
AEqual to the proportional share of the whole property value
BOften less than the proportional share due to lack of control and marketability discounts✓ Correct
CAlways higher than proportional value due to scarcity
DDetermined exclusively by the property's income
Explanation
Fractional or partial interests in real property are often valued at a discount relative to their proportional share of the whole because they are harder to sell (limited marketability) and may not give the holder control over decisions (lack of control). These discounts are applied to reflect market reality.
Related Alaska Property Valuation Questions
- In Alaska, when an appraiser uses 'gross adjustments' to evaluate comparable sales quality, smaller gross adjustments generally indicate:
- In Alaska, the principle of substitution states that:
- A 'drive-by' or exterior-only appraisal in Alaska is formally known as a:
- Under the income approach, effective gross income (EGI) is calculated as:
- In Alaska, which legal description method is most commonly used for rural and remote land?
- A property generates annual net operating income (NOI) of $60,000. Using a capitalization rate of 8%, the estimated value using the income approach is:
- The income approach to value is MOST appropriate for valuing which Alaska property type?
- The principle of highest and best use in Alaska appraisal requires that the use be:
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