Property Valuation
What is 'correlation' (reconciliation) in the appraisal process?
AComparing the property to others in the market
BThe process by which the appraiser weighs the results of the different valuation approaches and arrives at a final value estimate✓ Correct
CThe statistical relationship between cap rates and interest rates
DThe process of verifying comparable sales data
Explanation
Reconciliation (also called correlation) is the final step in the appraisal process where the appraiser weighs the results from each approach (sales comparison, cost, income) based on the quality of data and appropriateness for the property type, arriving at a single final value estimate.
Related California Property Valuation Questions
- The Uniform Standards of Professional Appraisal Practice (USPAP) are developed and maintained by:
- External obsolescence (economic obsolescence) is caused by:
- Which appraisal approach is most commonly used for single-family homes?
- What is the cost approach to value?
- What is a capitalization rate (cap rate)?
- In the income approach to valuation, Net Operating Income (NOI) is calculated as:
- The principle of progression states that:
- The principle of 'substitution' in real estate valuation holds that:
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