Property Valuation
When a Kansas appraiser makes a negative adjustment to a comparable sale, it means:
AThe subject property is inferior to the comparable on that feature
BThe comparable is superior to the subject on that feature, so its price is reduced to reflect the difference✓ Correct
CThe comparable sold at a below-market price
DThe comparable is in a lower-priced neighborhood
Explanation
A negative adjustment is made to the comparable when it is superior to the subject on a feature. Reducing the comparable's price accounts for the fact that the subject does not have that superior feature.
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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.
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.
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