In a sales comparison appraisal, if a comparable sale has a garage and the subject property does not, the appraiser makes an adjustment by:
Why Subtracting value from the comparable (making it look more like the subject) Is Correct
Answer B: Subtracting value from the comparable (making it look more like the subject)
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
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- In the sales comparison approach, the appraiser makes adjustments to the comparable sales to account for differences from the subject property. If a comparable has a feature the subject lacks, the adjustment is:Property Valuation
- When adjusting a comparable sale in the sales comparison approach, an appraiser ADDS value to the comparable when the comparable is:Property Valuation
- An appraiser values a property using the sales comparison approach and finds that a comparable property has a swimming pool worth $15,000 but the subject property does not. What adjustment does the appraiser make?Property Valuation
- When using the sales comparison approach, which of the following properties would typically be selected as a comparable sale?Property Valuation
Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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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