Property Valuation
An appraiser's final reconciled value in an appraisal report is typically:
AThe average of all three approaches
BThe highest value produced by any approach
CA weighted judgment based on the reliability and applicability of each approach for the specific property✓ Correct
DAlways based solely on the sales comparison approach
Explanation
Reconciliation is the final step in an appraisal where the appraiser reviews all three approaches (sales comparison, cost, income) and weighs each based on its reliability and applicability for the specific property type. The final value is a professional judgment, not a simple average.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
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