Property Valuation
The 'effective date' of an appraisal refers to:
AThe date the appraiser is hired
BThe date as of which the value opinion applies✓ Correct
CThe date the appraisal report is delivered
DThe date of the property inspection
Explanation
The effective date is the specific date as of which the value opinion is applicable. Market conditions as of that date are used.
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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.
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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