In Arizona, when comparable sales are limited, an appraiser may use 'expanded geographic area' searches. This means the appraiser:
Why Uses sales from a broader but still reasonably comparable market area when the immediate area lacks sufficient data Is Correct
Answer B: Uses sales from a broader but still reasonably comparable market area when the immediate area lacks sufficient data
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.
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Key Terms to Know
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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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