Property Valuation
A NH appraiser who adjusts a comparable's sale price downward because the comparable has a finished basement the subject lacks is making:
AA positive adjustment to the comparable
BA negative adjustment to the comparable to reflect the difference✓ Correct
CAn adjustment to the subject
DNo adjustment is needed
Explanation
If the comparable is superior (has finished basement; subject does not), the appraiser subtracts from the comparable's price. The rule: comparable superior = subtract; comparable inferior = add.
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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.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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