Property Valuation
A Mississippi appraiser determines a comparable sale has a superior garage (2-car vs. subject's 1-car). Comparable sold for $210,000. The market indicates a 1-car garage is worth $8,000. The adjusted sale price of the comparable is:
A$218,000
B$202,000✓ Correct
C$210,000
D$192,000
Explanation
The comparable is superior to the subject in garage size. To make the comparable equal to the subject, subtract the value of the superior feature: $210,000 - $8,000 = $202,000.
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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