Property Valuation
In New Mexico, an appraiser is asked to estimate the 'value in use' of a specialty property (e.g., a church or school). This value differs from market value because:
AValue in use is always higher than market value
BValue in use estimates the property's worth for its specific current use to a specific user, while market value estimates the price in an open, competitive market✓ Correct
CValue in use ignores the cost approach
DMarket value is used only for residential properties
Explanation
Value in use measures the utility of a specific property to a specific user for a specific purpose, which may differ significantly from market value (the price in an arm's length transaction between informed buyers and sellers). Specialty properties often have limited market value relative to their value in use.
Related New Mexico Property Valuation Questions
- An appraiser applies a 'paired sales analysis' to estimate the value contribution of a garage in a New Mexico market. This technique:
- An appraiser in Albuquerque applies a downward adjustment to a comparable sale because the comparable has a view of the Sandia Mountains but the subject property does not. This is because:
- A New Mexico property generates $30,000 in annual net operating income (NOI). If the capitalization rate is 6%, what is the estimated value?
- The principle of progression in real estate valuation means that:
- In New Mexico, the assessed value of residential property for tax purposes is typically:
- In the income approach, 'effective gross income' is calculated as:
- A comparable sale sold for $250,000 and has a feature the subject property lacks. The appraiser adjusts the comparable by -$5,000. This means:
- Gross Rent Multiplier (GRM) is calculated as:
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