A NC appraiser who adds value to a comparable for its superior condition compared to the subject is:
Why Incorrect — a comparable superior to the subject requires a negative (downward) adjustment to the comparable Is Correct
Answer B: Incorrect — a comparable superior to the subject requires a negative (downward) adjustment to the comparable
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
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Related North Carolina Questions
- When adjusting comparables in the sales comparison approach, the appraiser adjusts the comparable, not the subject. If a comp has a superior feature, the adjustment is:Property Valuation
- An appraiser uses a comp that sold for $320,000. The comp has a pool (value +$8,000) but lacks a garage (value -$12,000) compared to the subject. The adjusted comp value is:Real Estate Math
- An adjustment in the sales comparison approach for a feature the subject property HAS but the comparable does NOT have requires the appraiser to:Property Valuation
- A NC property appraiser finds three comparable sales adjusted to $285,000, $291,000, and $288,000. The most likely indicated value for the subject is:Real Estate Math
- In the sales comparison approach, an adjustment is made for a feature the comparable has but the subject lacks. This is:Property Valuation
- An appraiser who adjusts a comparable's price upward by $5,000 for having one fewer bathroom than the subject property is applying which step of the sales comparison approach?Property Valuation
Key Terms to Know
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.
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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