Property Valuation
An appraiser adjusts a comparable sale for its superior garage (+$12,000) and inferior kitchen (−$8,000) compared to the subject property. The comparable sold for $385,000. What is the adjusted comparable price?
A$381,000✓ Correct
B$389,000
C$377,000
D$393,000
Explanation
Adjustments to the comparable: subtract the garage superior feature (−$12,000) and add for the inferior kitchen (+$8,000). Adjusted price = $385,000 − $12,000 + $8,000 = $381,000.
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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.
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