A Colorado appraiser identifies a subject property in an area with rapidly rising prices. To demonstrate 'market conditions' (time adjustments), the appraiser should:
Why Use paired sales or resale analysis to quantify the price appreciation per month or percent change Is Correct
Answer B: Use paired sales or resale analysis to quantify the price appreciation per month or percent change
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.
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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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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