Property Valuation
What does 'overall rate' (OAR) mean in a Delaware income property appraisal?
AThe overall capitalization rate used to convert NOI to value✓ Correct
BThe total rate of return including both income and appreciation
CThe overall commission rate paid to all agents in a transaction
DThe overall mortgage rate including points and fees
Explanation
The Overall Rate (OAR) is the overall capitalization rate — the ratio of NOI to sale price (or value). It reflects the current market expectations for a property type and location, and is used to convert a property's NOI into a value estimate.
Related Delaware Property Valuation Questions
- What is a 'market study' versus a 'marketability study' in Delaware real estate?
- In an income property analysis, 'potential gross income' (PGI) is:
- Which approach to value is most appropriate for a Delaware single-family residence in a neighborhood of recent sales?
- When appraising using the sales comparison approach, a positive adjustment to a comparable sale is made when:
- Functional obsolescence in an appraisal refers to:
- In an appraisal, what is an 'adjustment' in the sales comparison approach?
- Using the income approach, if a property has a NOI of $45,000 and the cap rate is 7.5%, what is the estimated value?
- The income capitalization approach to value is most appropriate for:
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