Property Valuation
In New Jersey's active suburban real estate market, which valuation approach is most commonly used for single-family residential appraisals?
ACost approach
BIncome approach
CSales comparison approach✓ Correct
DGross rent multiplier approach
Explanation
The sales comparison approach is the most commonly used and most reliable approach for single-family residential properties in active markets, where sufficient comparable sales data is available.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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.
Math Concepts
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