Property Valuation
Which appraisal approach is most commonly used for residential properties in the Fargo, North Dakota market?
AIncome approach
BCost approach
CSales comparison approach✓ Correct
DGross rent multiplier approach
Explanation
The sales comparison approach (also called the market data approach) is the most commonly used method for valuing single-family residential properties like those in the Fargo market, as it relies on recent comparable sales.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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