Property Valuation
When a NC appraiser uses a market extraction method to determine a capitalization rate, they analyze:
AConstruction costs of similar buildings
BRecent sales of comparable income-producing properties, dividing NOI by sale price to derive market cap rates✓ Correct
CThe property owner's desired return
DPublished cap rate surveys only
Explanation
Market extraction derives cap rates from actual market transactions — dividing the NOI of recently sold comparable properties by their sale prices to identify the rates investors are actually accepting in the market.
Related North Carolina Property Valuation Questions
- The principle of 'progression' in real estate appraisal states that:
- External (economic) obsolescence in real estate is characterized as:
- NC appraisers must comply with the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP requires appraisers to provide:
- The Uniform Standards of Professional Appraisal Practice (USPAP) is issued by:
- A property in Raleigh, NC has a net operating income of $48,000 and the market capitalization rate is 8%. Its estimated value using the income approach is:
- Plottage value refers to:
- An appraiser is using the income approach to value a small apartment building. The property generates $96,000 annual gross income and has a 10% vacancy rate, operating expenses of $30,000, and a cap rate of 8%. What is the indicated value?
- NC appraisers are required to be licensed or certified by which state body?
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