Property Valuation
A Minnesota appraiser's final value reconciliation requires reconciliation among three approaches. Which approach typically receives the most weight for a residential property?
ACost approach
BIncome approach
CSales comparison approach✓ Correct
DAll three approaches are weighted equally
Explanation
For residential properties in Minnesota, the sales comparison approach typically receives the most weight because residential buyers primarily base their decisions on what comparable homes have sold for in the market. The cost approach is useful as a check, and the income approach is rarely relevant for owner-occupied residences.
Related Minnesota Property Valuation Questions
- Depreciation in real estate appraisal (for the cost approach) is defined as:
- A Minnesota rental property has potential gross income of $96,000, vacancy and credit loss of 5%, and operating expenses of $32,000. What is the NOI?
- External obsolescence (economic obsolescence) is caused by:
- In Minnesota, an appraisal report that meets USPAP requirements for mortgage lending purposes is typically presented as a(n):
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