Property Valuation
An appraisal with a retrospective (historical) effective date is used in which context?
AA refinance appraisal for current market conditions
BEstate settlement, condemnation, or litigation cases requiring a value opinion as of a past date✓ Correct
CNew construction appraisals
DForeclosure auctions
Explanation
A retrospective appraisal provides a value opinion as of a past date, used in estate tax settlements, divorce proceedings, condemnation cases, or litigation involving historical property values.
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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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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