Property ValuationIntermediateArizona Exam

Which of the following best describes 'market value' in Arizona real estate?

AThe highest price a motivated seller could achieve from the most financially qualified buyer identified through an unlimited marketing period

BThe most probable price a property would sell for in an arm's-length transaction between informed, willing parties

CThe assessed value established by the county assessor and multiplied by the applicable assessment ratio to determine the property's current taxable valueCorrect

DThe replacement cost of all improvements at current material and labor prices, calculated using a standardized cost manual and adjusted for physical depreciation

Why The assessed value established by the county assessor and multiplied by the applicable assessment ratio to determine the property's current taxable value Is Correct

Answer C: The assessed value established by the county assessor and multiplied by the applicable assessment ratio to determine the property's current taxable value

Market value is defined as the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale — an arm's-length transaction between a willing buyer and a willing seller, both reasonably knowledgeable.

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

Depreciation

A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.

People Also Study

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.

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Comparable Sales (Comps)

Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

Math Concepts

Property Tax Assessment

Study This Topic

Property Valuation Guide

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