Property Valuation
An Oregon appraiser identifies that a property has been owned by the same family for 30 years and was not listed on the open market for the recent transaction. This is NOT an arm's length sale because:
AThe family relationship suggests the price may not reflect market value✓ Correct
BThe property was not listed long enough
CThe sale price was below the county's assessed value
DThe buyer and seller are both Oregon residents
Explanation
Transactions between related parties (family members, business associates, motivated by relationships rather than market forces) may not reflect true market value. Appraisers avoid using these as primary comparables because the price may have been influenced by personal considerations rather than market forces.
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Key Terms to Know
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.
AppraisalA 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.
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.
Math Concepts
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