Property Valuation
An appraiser's 'market conditions adjustment' (time adjustment) in the sales comparison approach accounts for:
AGeographic differences between the comparable and subject properties
BValue changes that occurred between the comparable sale date and the appraisal's effective date✓ Correct
CSeasonal variations in listing activity
DThe lender's required adjustment for market risk
Explanation
A time/market conditions adjustment acknowledges that values change over time. If comparable sales are from 12 months ago in a rising market, an upward adjustment is made to reflect what they would have sold for at the appraisal date.
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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.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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