Property Valuation
An appraiser uses the 'reconciliation' process at the end of an appraisal to:
AAverage the three approaches to value
BWeight and analyze the results of the different approaches to arrive at a final value opinion✓ Correct
CMatch the value to the sale price
DVerify the accuracy of the title search
Explanation
Reconciliation is the process by which an appraiser analyzes and weights the results of each approach to value (sales comparison, income, cost) to arrive at a final, supportable opinion of value.
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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.
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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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