Property Valuation
In New Mexico, what is the 'indicated value' in the sales comparison approach?
AThe average of all comparable sale prices
BThe adjusted sale price of each comparable after all adjustments are made to reflect the subject property✓ Correct
CThe appraiser's final value conclusion
DThe listing price of the property
Explanation
Each comparable sale, after all adjustments, yields an 'indicated value' for the subject. These indicated values are then reconciled (weighted and considered) to arrive at the final value estimate.
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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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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