Property ValuationIntermediateColorado Exam

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 salesCorrect

CPair buyers with sellers of similar properties

DDetermine if two sales occurred simultaneously, which most practitioners would generally accept

Why Measure the value contribution of a specific feature by comparing two otherwise similar sales Is Correct

Answer B: Measure the value contribution of a specific feature by comparing two otherwise similar sales

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.

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

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

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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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