Property Valuation
In New Mexico, an appraiser's 'scope of work' under USPAP must include, at minimum:
AA full interior and exterior inspection for all assignments
BIdentification of the problem, determination of the appropriate approach(es), and the extent of research, analysis, and reporting necessary to produce credible results✓ Correct
CUse of all three approaches to value in every appraisal
DA minimum of 5 comparable sales
Explanation
USPAP's Scope of Work rule requires the appraiser to identify the appraisal problem, determine what approaches are relevant, and determine the extent of research and analysis needed to produce a credible result given the intended use. More complex assignments require broader scope.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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