Property Valuation
When a Maine appraiser adjusts a comparable sale that has a garage when the subject property does not, the appraiser should:
AAdd value to the comparable
BSubtract value from the comparable✓ Correct
CAdd value to the subject
DIgnore the difference
Explanation
When a comparable has a feature the subject property lacks, the appraiser subtracts the value of that feature from the comparable's sale price to equate it to the subject. The rule is: 'CBS — Comparable Better, Subtract.'
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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.
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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