Property Valuation
Paired sales analysis in appraising is used to:
ACompare two appraisers' opinions to find an average value
BIsolate the value contribution of a specific feature by comparing otherwise similar sales✓ Correct
CPair rural and urban properties to establish statewide averages
DPair buyer and seller data to verify market conditions
Explanation
Paired sales analysis identifies two comparable sales that are identical except for one feature (e.g.
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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.
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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