Property Valuation
When comparing sales in the sales comparison approach, a positive adjustment is made to the comparable when:
AThe comparable is superior to the subject in that feature
BThe comparable is inferior to the subject in that feature✓ Correct
CThe comparable sold for more than the subject's list price
DThe comparable has more square footage than the subject
Explanation
If the comparable is inferior to the subject in a feature (smaller garage, no pool), a positive adjustment increases the comp's price to reflect what it would have sold for with that feature.
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA 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.
Math Concepts
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