A Colorado appraiser determines that a property has 'superadequacy' (overimprovement). This means:
Why B. The property has features that are excessive for the neighborhood and market, resulting in value loss because the excess cost cannot be recovered through higher sale prices Is Correct
Answer B: B. The property has features that are excessive for the neighborhood and market, resulting in value loss because the excess cost cannot be recovered through higher sale prices
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
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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