Property Valuation
A Nebraska appraiser reconciles three approaches: Sales Comparison = $285,000; Cost = $290,000; Income = $278,000. For a single-family home, the appraiser will give MOST weight to:
ACost approach
BIncome approach
CSales comparison approach✓ Correct
DAverage of all three
Explanation
For single-family residences, the sales comparison approach is given the most weight because comparable market data best reflects what buyers will pay. The income approach is more relevant for investment properties.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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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