Property Valuation
A NJ appraiser notes that a comparable sale has an 'arm's length' notation in the MLS. This means:
AThe transaction involved exceptionally long negotiation
BThe sale was between unrelated parties acting in their own self-interest without unusual pressure✓ Correct
CThe sale price was determined by an arm wrestle
DThe transaction was conducted at long distance
Explanation
An arm's-length transaction is one where the buyer and seller are independent, unrelated parties, each acting rationally in their own self-interest without compulsion, producing the most reliable indication of market value.
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Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
AppraisalA 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.
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