Property Valuation
A Kentucky appraiser notes that a property's effective age is less than its actual age. This means:
AThe appraiser made an error in estimating the construction date
BThe property has been well maintained or renovated, reducing apparent depreciation✓ Correct
CThe property is newer than public records indicate
DThe appraisal will show a lower value
Explanation
Effective age reflects the property's condition and utility rather than its chronological age. A well-maintained or renovated property has an effective age less than its actual age, indicating less depreciation and potentially higher value than an equivalent-age but poorly maintained property.
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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.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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