Property Valuation
A Maine appraiser is determining the value of a vacant lot for a proposed single-family home. The appraiser would primarily use which approach?
ACost approach
BIncome approach
CSales comparison approach✓ Correct
DAssessed value approach
Explanation
For vacant land, the sales comparison approach is primary, using comparable sales of similar vacant lots in the area to estimate value.
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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.
Math Concepts
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