Property Valuation
A Massachusetts commercial appraiser calculates a capitalization rate by:
ADividing NOI by the sale price of comparable properties✓ Correct
BAdding the mortgage rate and equity dividend rate
CUsing the assessed value divided by the sale price
DMultiplying gross rent by an appropriate factor
Explanation
Capitalization rates are derived from the market by dividing the NOI of recently sold comparable properties by their sale prices: Cap Rate = NOI ÷ Sale Price.
Related Massachusetts Property Valuation Questions
- A Massachusetts appraiser's 'scope of work' determination defines:
- An appraiser uses three comparable sales to estimate the value of a subject property. The adjusted values of the comparables are $415,000, $422,000, and $418,000. Which value should the appraiser most likely assign?
- The gross rent multiplier (GRM) is calculated as:
- A Massachusetts property is worth $500,000 and the land is valued at $100,000. The building is 15 years old with a 50-year economic life. What is the depreciation percentage?
- The principle of substitution states that:
- External obsolescence in a Massachusetts property appraisal is caused by:
- An appraiser is valuing a property for mortgage lending purposes. The appraisal report must be completed on a form compliant with:
- When a comparable sold 8 months ago and the market has appreciated at 0.5% per month, an appraiser would make a:
Practice More Massachusetts Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Massachusetts Quiz →