Property Valuation
When using the sales comparison approach in Nebraska, an appraiser adds $8,000 to the comparable sale because the comparable LACKS a feature the subject has. This is called a:
ANegative adjustment
BPositive adjustment to the comparable✓ Correct
CRetroactive adjustment
DValue reconciliation
Explanation
When a comparable lacks a feature the subject property has, the appraiser makes a positive adjustment (addition) to the comparable's sale price. The rule: if the comparable is inferior, adjust up; if superior, adjust down.
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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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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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