Property Valuation
A Minnesota appraiser uses the sales comparison approach to value a single-family home. Which type of comparable sale is most preferred?
AREO/bank-owned sales
BShort sales
CArm's-length sales between unrelated parties✓ Correct
DEstate sales below market value
Explanation
Arm's-length sales between unrelated, motivated buyers and sellers with no duress represent the best market data for appraisal purposes. REO, short sales, and estate sales may be distress transactions that don't reflect true market value. Minnesota appraisers prefer recent arm's-length sales in the subject's market area.
Related Minnesota Property Valuation Questions
- In the cost approach to value, the appraiser estimates:
- When appraising a lakefront home in Minnesota, which factor would an appraiser most likely consider as adding significant value compared to a similar non-lakefront home?
- The gross rent multiplier (GRM) is calculated as:
- Regression and progression are appraisal principles related to:
- Which appraisal approach is most commonly used to value single-family residential properties in Minnesota?
- In the income capitalization approach, if a Minnesota rental property has a Net Operating Income (NOI) of $48,000 and the capitalization rate is 6%, what is the estimated value?
- Assemblage in Minnesota real estate valuation refers to:
- When appraising an income property in Minnesota, Effective Gross Income (EGI) is calculated as:
Practice More Minnesota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Minnesota Quiz →