Property Valuation
In Arizona, an 'as-is' appraisal differs from an 'as-completed' or 'subject-to' appraisal in that:
AAn as-is appraisal ignores any defects in the property
BAn as-is appraisal reflects the current condition of the property, while an as-completed appraisal projects the value after proposed repairs or renovations are completed✓ Correct
CAn as-is appraisal is used only for bank-owned properties
DThere is no legal distinction between the two appraisal types in Arizona
Explanation
An as-is appraisal values the property in its current condition, including any deficiencies. A subject-to or as-completed appraisal values the property assuming certain repairs, renovations, or construction will be completed—commonly used for purchase-renovation loans or new construction.
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property 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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