Property Valuation
An Oregon appraiser is asked to value property for a condemnation (eminent domain) proceeding. The appraiser must value the property at:
AIts assessed value for tax purposes
BIts fair market value — the price a willing buyer and willing seller would agree to in an arm's length transaction✓ Correct
CIts replacement cost less depreciation
D50% of its current listing price
Explanation
In eminent domain (condemnation) proceedings, the government must pay 'just compensation,' which is typically defined as fair market value — what a willing buyer would pay a willing seller in an arm's length transaction. The appraiser estimates this value to establish the compensation owed to the property owner.
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Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Eminent DomainThe power of government to take private property for public use, with the requirement to pay the owner just compensation.
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.
Math Concepts
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