Property Valuation
In Michigan, a 'green' or energy-efficient home may command a premium in the market because buyers value:
AOnly the aesthetic appearance of green features
BLower utility costs, reduced environmental impact, and potential higher resale value✓ Correct
CGovernment subsidies for buying green homes
DOnly solar panels and nothing else
Explanation
Michigan buyers increasingly value energy efficiency (insulation, high-efficiency HVAC, solar, energy-rated windows) for lower utility bills and reduced environmental impact. Michigan appraisers must address green features if they contribute to market 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.
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
State-Specific Concepts
DRE Regulation
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