Property Valuation
The percentage adjustment for a specific feature in the sales comparison approach is determined by:
AThe appraiser's personal preference
BPaired sales analysis and market data showing how buyers value that specific feature✓ Correct
CThe assessor's value for that feature
DThe cost to add the feature new
Explanation
Adjustments are derived from paired sales analysis — comparing sales of otherwise similar properties that differ only in the feature being adjusted for — and from market data showing what buyers actually pay for that feature.
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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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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