Property Valuation
The 'three approaches to value' used by Connecticut appraisers are:
ACost, income, and market analysis
BSales comparison, cost, and income approaches✓ Correct
CMarket, replacement, and capitalization approaches
DGross rent, net rent, and price per square foot
Explanation
Connecticut appraisers (and all USPAP-compliant appraisers) use three approaches: (1) Sales Comparison Approach, (2) Cost Approach, and (3) Income Approach.
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Key Terms to Know
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.
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.
Math Concepts
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