Property Valuation
An appraiser values a Connecticut property at $520,000 using the sales comparison approach and $540,000 using the cost approach. There is no income approach. The appraiser's final value opinion is $525,000. The $25,000 difference between the approaches is handled through:
AAveraging the two approaches
BAlways selecting the higher value
CReconciliation: weighting approaches based on reliability, purpose, and data quality✓ Correct
DAlways selecting the lower value for conservative lending
Explanation
Reconciliation is not simple averaging. The appraiser considers the purpose of the appraisal, the quantity and quality of data supporting each approach, the type of property, and the reliability of each approach to determine the final value opinion.
People Also Study
Related Connecticut Questions
- An appraiser using the cost approach to value a property would:Property Valuation
- When using the sales comparison approach, an appraiser makes adjustments to comparables to account for differences with the subject property. If a comparable has a feature the subject lacks, the adjustment to the comparable is:Property Valuation
- The income approach to value is most appropriate for valuing which type of Connecticut property?Property Valuation
- If a Connecticut income property has an NOI of $90,000 and the market cap rate is 6%, what is the estimated value using the income approach?Property Valuation
- A Connecticut property has land value of $120,000 and improvement value (after depreciation) of $310,000. Using the cost approach, what is the total value?Real Estate Math
- A Connecticut property has a potential gross income of $96,000/year, a 5% vacancy rate, and operating expenses equal to 40% of EGI. Using an 8% cap rate, what is the property value?Real Estate Math
- A Connecticut property investor's annual gross rental income is $108,000. After a 6% vacancy allowance and $39,000 in expenses, the NOI is used to determine value at an 8.5% cap rate. What is the property value?Real Estate Math
- A Connecticut investment property generates monthly rents of $3,500. Using a GRM of 130, what is the estimated value?Real Estate Math
Key Terms to Know
Appraisal
A 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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Study This Topic
Practice More Connecticut Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Connecticut Quiz →