Property Valuation
The sales comparison approach to value is MOST reliable for:
AUnique commercial properties with no comparable sales
BResidential properties in active markets with many recent comparable sales✓ Correct
CAgricultural land with no nearby sales
DNew construction where cost data is available
Explanation
The sales comparison approach works best when there are many similar properties that have sold recently in the same market area, making it the primary method for single-family residential appraisals. It loses reliability when comparable sales are scarce or the property is unique.
Related California Property Valuation Questions
- Plottage (assemblage) refers to:
- A property has an annual gross income of $60,000 and a GRM of 10 (annual). What is the estimated value?
- What is the purpose of the 'Uniform Standards of Professional Appraisal Practice' (USPAP)?
- The sales comparison approach to property valuation is MOST appropriate when appraising:
- A property generates annual rental income of $96,000. An appraiser uses a gross rent multiplier (GRM) of 13 to estimate value. What is the indicated value?
- A Competitive Market Analysis (CMA) prepared by a real estate licensee differs from a formal appraisal in that:
- 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?
- What does 'plottage' refer to?
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