Property Valuation
A Mississippi appraiser discovers that a comparable sale was influenced by non-market conditions (e.g., tax deferred exchange requiring a quick close). The appraiser should:
AUse it without any consideration
BExclude or use it with caution and disclose the non-market conditions affecting the sale✓ Correct
CGive it more weight because it is recent
DAdjust it by 5% automatically
Explanation
Comparable sales should reflect arm's-length market conditions. Sales influenced by unusual financing, tax motivations, or compulsion should be excluded or used with caution and appropriate disclosure in the appraisal report.
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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.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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