An appraiser in Colorado uses 3 comparable sales to value a property. The adjusted values are $385,000, $392,000, and $395,000. What is the most likely final value indication from reconciliation?
Why The value closest to the subject's characteristics, given the most weight Is Correct
Answer B: The value closest to the subject's characteristics, given the most weight
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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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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