Property Valuation
When appraising special-purpose properties in Arizona (gas stations, car washes), the appraiser typically:
AUses only the sales comparison approach
BConsiders all approaches with cost and income approaches often receiving the most weight✓ Correct
CCannot appraise special-purpose properties without government approval
DUses the land value as the primary indicator
Explanation
Special-purpose properties have limited comparable sales, making the sales comparison approach difficult. Appraisers typically apply all three approaches and give more weight to cost and income approaches, reconciling to a final value.
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Key Terms to Know
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.
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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