An appraiser in Colorado finds only two sales of similar properties in the past 6 months. To find more comparables, the appraiser might:
Why B. Expand the search to a larger geographic area, extend the time frame, or use sales of slightly less similar properties with larger adjustments Is Correct
Answer B: B. Expand the search to a larger geographic area, extend the time frame, or use sales of slightly less similar properties with larger adjustments
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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