When using the sales comparison approach, which of the following properties would typically be selected as a comparable sale?
Why A similar home in the same neighborhood that sold in an arm's-length transaction within the past 6 months Is Correct
Answer C: A similar home in the same neighborhood that sold in an arm's-length transaction within the past 6 months
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
People Also Study
Related California Questions
- 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
- A 2,000 sq ft home in a neighborhood has a value of $400 per square foot based on comparable sales. Using the sales comparison approach, what is the indicated value?Property Valuation
- 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
- A commercial property has an annual NOI of $105,600 and comparable properties are selling at a 7% cap rate. What is the property's value using the income approach?Real Estate Math
- A property's NOI is $54,000 per year. A comparable property recently sold at a 7.5% cap rate. Using the income approach, what is this property's estimated value?Real Estate Math
- A property has an NOI of $45,000 and similar properties in the area have a cap rate of 7.5%. What is the estimated value?Real Estate Math
Key Terms to Know
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Math Concepts
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →