Property Valuation
Iowa agricultural land values differ significantly from urban residential values primarily because:
AIowa farmland is exempt from all valuation standards
BFarmland value is driven by productivity, commodity prices, and investment demand, not local comparable home sales✓ Correct
CFarmland is always worth more per acre than urban land
DIowa law prohibits using the sales comparison approach for farmland
Explanation
Farmland valuation is driven by agricultural productivity (CSR2 ratings, tillable acres, drainage), commodity prices (corn and soybean), and farm income. These factors differ substantially from urban residential markets.
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Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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