In the sales comparison approach, a positive adjustment to a comparable sale means:
Why The comparable is inferior to the subject in that feature, so value is added to the comparable Is Correct
Answer B: The comparable is inferior to the subject in that feature, so value is added 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
- 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
- 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 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
- In the sales comparison approach, an adjustment is made for a feature the comparable has but the subject lacks. This is: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
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.
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.
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.
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