The 'stigma discount' concept in appraisal is applied when:
Why Market perception reduces a property's value due to a past or current negative event Is Correct
Answer B: Market perception reduces a property's value due to a past or current negative event
Exam Tip: Environmental
Environmental questions test knowledge of hazards like asbestos, lead-based paint, radon, and mold. Know the disclosure requirements and when a professional inspection is required. CERCLA liability is strict, joint, and several.
Key Environmental Terms in This Question
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Key Terms to Know
A 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.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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