Property Valuation
A NJ appraiser's estimate of value is expressed as of a specific 'effective date' because:
AValues are permanent and never change
BReal estate values fluctuate over time, and the appraisal reflects conditions as of the date the value opinion is rendered✓ Correct
CNJ law requires appraisals to be updated daily
DThe effective date determines the tax assessment
Explanation
An appraisal represents a snapshot in time. Market conditions, comparable sales, and value change over time, so the effective date establishes the specific point in time to which the value conclusion applies.
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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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
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