Property Valuation
A 'paired sales analysis' is used by appraisers to:
ACompare two different properties for listing purposes
BIsolate the value contribution of a single feature by comparing sales that differ only in that feature✓ Correct
CCalculate the average price per square foot in a neighborhood
DDetermine a property's replacement cost
Explanation
Paired sales analysis involves finding two comparable sales that are identical except for one feature, allowing the appraiser to isolate and quantify the market value contribution of that specific feature.
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Key Terms to Know
Comparable Sales (Comps)
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
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