Property Valuation
When a New York appraiser determines that a comparable sale was a 'distressed sale' (foreclosure or short sale), they typically:
AUse it without adjustment
BAdjust it upward to reflect what a non-distressed sale would have brought, or exclude it✓ Correct
CReduce the subject value by the distressed amount
DUse it as the primary comparable
Explanation
Distressed sales (foreclosures, short sales, REO) often sell below market value due to the seller's motivation. Appraisers typically adjust these sales upward or exclude them when deriving market value for a non-distressed subject property.
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Key Terms to Know
Short Sale
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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