Property Valuation
A subject property has a two-car garage, while the best comparable has a one-car garage. Paired sales data suggests a two-car garage adds $15,000 in value. The appraiser should:
AAdd $15,000 to the comparable's sale price✓ Correct
BSubtract $15,000 from the comparable's sale price
CMake no adjustment since the garage size doesn't affect value
DAverage the two garage values
Explanation
The subject is superior (two-car garage vs. one-car).
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Key Terms to Know
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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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