Property Valuation
In Montana, when appraising a property with significant environmental contamination, the appraiser must:
AIgnore the contamination since it is an environmental issue, not an appraisal issue
BConsider the contamination's impact on value, typically consulting with environmental professionals and noting assumptions and limitations in the report✓ Correct
CAutomatically value the property at zero
DReport the contamination to the DEQ before completing the appraisal
Explanation
Appraisers must consider environmental contamination and its impact on property value. The appraiser may need to make extraordinary assumptions about cleanup costs and liability, consult with environmental professionals, and clearly disclose limitations 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.
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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