Property Valuation
When a Michigan appraiser performs a 'drive-by' or exterior-only appraisal, this is known as a:
AFull appraisal
BLimited appraisal or restricted use appraisal report✓ Correct
CDesktop appraisal
DComparative market analysis
Explanation
An exterior-only or drive-by appraisal is a limited appraisal where the appraiser inspects only the exterior of the property. It may be used for low-risk refinances but has limitations on accuracy compared to a full interior inspection.
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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.
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