Property ValuationIntermediateArizona Exam

In Arizona's competitive real estate market, when multiple comparable sales exist, an appraiser should give the greatest weight to:

AThe comparables with the lowest sale prices, since conservative appraisal practice requires selecting the most pessimistic data points to protect lenders from overvaluation
BThe most recently sold, most geographically proximate, and most physically similar comparables to the subject propertyCorrect
CThe comparable with the highest sale price as the primary benchmark, since the income approach requires identifying the maximum achievable value for the appraised property
DOnly comparables involving new construction of the same type, since USPAP prohibits the use of resale comparables for properties constructed within the prior 2 years

Why The most recently sold, most geographically proximate, and most physically similar comparables to the subject property Is Correct

Answer B: The most recently sold, most geographically proximate, and most physically similar comparables to the subject property

Appraisers weight comparables based on their similarity to the subject: recency of sale (more recent = more reflective of current market), proximity (same neighborhood = more similar market conditions), and physical similarity (size, age, condition, features). The most similar recent nearby sales receive the most weight.

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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