Real Estate Math
A Fargo home appraiser finds three comparable sales. After adjustments, the indicated values are $295,000, $302,000, and $298,000. The appraiser's reconciled value is likely:
A$295,000
B$895,000✓ Correct
C$300,000
D$302,000
Explanation
Reconciliation involves weighing all indicators. The average of these three values is ($295,000 + $302,000 + $298,000) / 3 = $895,000 / 3 ≈ $298,333.
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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