When Colorado property values are declining, a seller who insists on pricing their home above comparable sales is experiencing:
Why B. Overpricing that will likely result in the property sitting on the market longer and eventually selling for less than if priced correctly from the start Is Correct
Answer B: B. Overpricing that will likely result in the property sitting on the market longer and eventually selling for less than if priced correctly from the start
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
1031 ExchangeA tax-deferred exchange allowing investors to sell one investment property and reinvest proceeds in a like-kind property while deferring capital gains taxes.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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