Property Valuation
In a declining real estate market, an appraiser would likely apply:
AA. Negative adjustments for all properties
BB. Time adjustments to reflect the market's downward trend when using older comparable sales✓ Correct
CC. Higher cap rates only for luxury properties
DD. Cost approach exclusively for all property types
Explanation
When market values are declining, an appraiser must apply negative time adjustments to comparable sales from earlier, higher-priced periods to reflect current market conditions. Failure to adjust for market trends leads to overvaluation.
Related Georgia Property Valuation Questions
- When an appraiser reports a value 'subject to completion' on a new construction, this means:
- A Georgia property has an annual NOI of $54,000 and a capitalization rate of 6%. What is the estimated value?
- When comparing two properties using the sales comparison approach, an appraiser finds a comp with an extra bathroom. The appraiser should make an adjustment to the comparable by:
- Effective age in appraisal refers to:
- A capitalization rate for an income property is influenced by all of the following EXCEPT:
- In appraisal, the 'as-improved' value differs from the 'as-is' value in that:
- The 'income approach' to value is MOST appropriate for:
- In the sales comparison approach to value, the appraiser makes adjustments to the comparable sales. If a comparable lacks a feature that the subject property has, the appraiser should:
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