Property Valuation
What is 'cash equivalency adjustment' in real estate appraisal?
AAn adjustment for properties that sell for cash versus financed purchases
BAn adjustment made when a comparable sale involved favorable seller financing (below-market interest rate) — the appraiser adjusts the price to reflect what a cash or conventionally financed buyer would have paid✓ Correct
CAn adjustment for properties with unusual cash payment requirements
DAn adjustment for currency exchange differences in international transactions
Explanation
A cash equivalency adjustment is applied when a comparable sale involved below-market seller financing or other favorable credit terms that inflated the sale price. The appraiser adjusts the inflated price downward to reflect the cash equivalent value — what the property would have sold for in a conventionally financed or cash transaction, providing a valid comparable for appraisal purposes.
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