Property Valuation
Which of the following BEST defines 'market value' as used by Arizona appraisers?
AThe price a property was most recently listed for
BThe most probable price a property would bring in a competitive and open market under all conditions requisite to a fair sale✓ Correct
CThe assessed value assigned by the county assessor
DThe insurance replacement value of the improvements
Explanation
Market value is the most probable price a property would sell for in an arm's-length transaction between a willing, informed buyer and seller, neither under compulsion to act, with reasonable market exposure.
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Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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