Property Valuation
In Colorado appraisal practice, a 'paired sales analysis' is used to:
ACompare two properties sold by the same seller
BMeasure the value contribution of a specific feature by comparing two otherwise similar sales✓ Correct
CPair buyers with sellers of similar properties
DDetermine if two sales occurred simultaneously
Explanation
Paired sales analysis measures the dollar adjustment for a specific feature (garage, pool, bedroom) by comparing two sales that are alike except for that one feature.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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