What is a 'comparable sale' (comp) in real estate appraisal?
Why A recently sold property that is similar to the subject property, used to estimate value through the sales comparison approach Is Correct
Answer B: A recently sold property that is similar to the subject property, used to estimate value through the sales comparison approach
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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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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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