Property Valuation
Which appraisal approach is most commonly used for owner-occupied single-family homes?
AIncome approach
BCost approach
CSales comparison approach✓ Correct
DGross rent multiplier approach
Explanation
The sales comparison approach is most commonly used for owner-occupied single-family homes because there are usually sufficient comparable sales to support the analysis.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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.
Math Concepts
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