Property Valuation
A Missouri appraiser who discovers that a comparable sale was a distressed sale (foreclosure or estate sale) should:
AUse it as a primary comparable
BDiscard it or apply significant adjustments since it may not reflect market value✓ Correct
CInflate its value
DReport it to MREC
Explanation
Distressed sales (foreclosures, estate sales under duress) may not reflect true market value because they don't involve typical willing buyer/seller dynamics. Appraisers should discount them or avoid using them.
People Also Study
Related Missouri Questions
- A Missouri appraiser making a time adjustment uses a market conditions analysis. In a rapidly appreciating Missouri market, older comparable sales would be adjusted:Property Valuation
- In Missouri, the market data approach (sales comparison) requires the appraiser to make adjustments for differences between comparable sales and the subject property. An adjustment for a feature the subject has but the comparable lacks is:Property Valuation
- A Missouri property is listed at $325,000. Three comparable sales showed values of $315,000, $320,000, and $318,000. The indicated market value is approximately:Property Valuation
- A Missouri appraiser using the sales comparison approach makes a negative adjustment for a feature the subject property lacks but the comparable has. This means:Property Valuation
- Under Missouri non-judicial foreclosure using a deed of trust, what is the minimum notice required before a trustee's sale?Finance
- A Missouri property has a market value of $225,000. Using a residential assessment ratio of 19%, what is the assessed value?Real Estate Math
- A Missouri home is assessed at 19% of its $350,000 market value. The tax rate is $8.00 per $100 of assessed value. What is the annual tax?Real Estate Math
- Missouri residential property is assessed at 19% of market value. If a home has a market value of $220,000, what is the assessed value?Real Estate Math
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.
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.
Study This Topic
Practice More Missouri Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Missouri Quiz →