Property Valuation
In the sales comparison approach, the appraiser adjusts for 'condition' of a comparable property that has deferred maintenance relative to the subject by:
ASubtracting the repair cost from the comparable's sale price
BAdding a positive adjustment to the comparable's sale price (the comparable is inferior)✓ Correct
CSubtracting from the subject's estimated value
DIgnoring the condition difference if it is cosmetic
Explanation
When the comparable is in worse condition (deferred maintenance) than the subject, a positive adjustment is added to the comparable's sale price because the comparable is inferior. This makes the adjusted comparable more equivalent to the subject.
Related Arkansas Property Valuation Questions
- When analyzing a sale for use as a comparable, the appraiser should first verify that it was an:
- The principle of 'substitution' in real estate appraisal states that:
- A going-concern value refers to:
- A property's highest and best use is defined as the use that is:
- A capitalization rate derived from market transactions is called a(n):
- The cost approach to value is MOST appropriate for appraising:
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- Regression is an appraisal principle that states:
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