Property Valuation
Which appraisal approach is most appropriate for valuing a single-family residence in a neighborhood with many recent sales?
AIncome capitalization approach
BCost approach
CSales comparison approach✓ Correct
DGross rent multiplier approach
Explanation
The sales comparison approach (market data approach) is the most appropriate method for valuing residential properties because it directly reflects what buyers are willing to pay based on recent comparable sales.
People Also Study
Related Massachusetts Questions
- Which appraisal approach is most commonly used for single-family residential properties in Massachusetts?Property Valuation
- A Massachusetts appraiser reconciles three approaches to value: Cost approach = $480,000; Sales comparison = $465,000; Income approach = $452,000. For a single-family residence, the appraiser would most likely give the greatest weight to:Property Valuation
- In the sales comparison approach, when a comparable sale has a feature the subject property LACKS, the appraiser:Property Valuation
- In the sales comparison approach, a comparable property sold for $520,000 and has a two-car garage worth $15,000 that the subject property lacks. The adjusted value of the comparable is:Property Valuation
- A Massachusetts property is appraised at $620,000 using the sales comparison approach and $640,000 using the income approach. The appraiser weights the sales comparison at 70% and the income approach at 30%. What is the reconciled value?Real Estate Math
Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
Study This Topic
Practice More Massachusetts Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Massachusetts Quiz →