Property Valuation
In Louisiana, the 'sales comparison approach' requires an appraiser to make adjustments that are:
ABased solely on the appraiser's opinion of relative desirability
BSupported by market evidence — paired sales analysis, cost studies, or statistical analysis of market data✓ Correct
CAlways equal to the cost of the feature being adjusted
DRequired to result in a specific predetermined value
Explanation
Adjustments in the sales comparison approach must be grounded in market evidence. Appraisers use paired sales analysis, cost data, or statistical analysis to support the adjustments made — not subjective opinion or predetermined values.
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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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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