Property Valuation
In New Mexico, an appraiser who values a property 'as if complete' for a proposed renovation project is providing what type of appraisal?
ARetrospective appraisal
BProspective appraisal (as-completed value)✓ Correct
CAs-is appraisal
DMass appraisal
Explanation
A prospective 'as-completed' or 'subject to completion' appraisal values the property assuming a proposed renovation or construction has been completed according to plans and specifications.
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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.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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