Property Valuation
In a competitive market analysis (CMA), a Minnesota agent adjusts a comparable sale that has one fewer bathroom than the subject property by:
ASubtracting value from the comparable
BAdding value to the comparable✓ Correct
CMaking no adjustment
DRejecting the comparable as unusable
Explanation
When the comparable is inferior to the subject (has one fewer bathroom), the agent adds value to the comparable to account for the difference. The adjustment brings the comparable up to the subject's level.
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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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