Property Valuation
An appraiser making an adjustment to a comparable sale for a superior feature means the adjusted value of the comparable is:
AIncreased to match the subject
BDecreased because the comparable is better than the subject✓ Correct
CLeft unchanged
DDoubled
Explanation
When a comparable has a superior feature not present in the subject, the appraiser subtracts (decreases) the comparable's value to make it equivalent to the subject. The adjustment reflects the feature's value contribution.
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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.
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
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