Property Valuation
In New York, a 'drive-by appraisal' (exterior-only appraisal) is:
ANever acceptable for any mortgage purpose
BA limited appraisal that does not include an interior inspection, sometimes acceptable for lower-risk refinance transactions or as supplemental data✓ Correct
CAlways used for properties in NYC co-op buildings
DRequired by New York law for all properties over $1,000,000
Explanation
A drive-by (or exterior-only) appraisal involves an exterior inspection and public records research but no interior inspection. It is less comprehensive than a full appraisal.
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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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
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