Property Valuation
In Kansas, the 'reconciliation' step in the appraisal process involves the appraiser:
AAdding all three approach values and dividing by three to get a final value
BUsing professional judgment to weigh each approach's reliability and relevance to arrive at a final opinion of value✓ Correct
CReconciling the appraisal with the purchase price
DObtaining the lender's concurrence on the value
Explanation
Reconciliation requires the appraiser to weigh the reliability, applicability, and appropriateness of each valuation approach and exercise professional judgment to arrive at a final, defensible opinion of value.
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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.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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.
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