Property Valuation
An Oregon appraiser reconciles the values from three approaches: cost ($445,000), sales comparison ($460,000), and income ($430,000). What is the most likely final value for a residential property?
A$445,000 — the cost approach is always most reliable
B$460,000 — the sales comparison approach is most reliable for residential properties✓ Correct
C$430,000 — the income approach drives residential values
DAn exact mathematical average of all three
Explanation
For residential properties, the sales comparison approach (market approach) is generally the most reliable indicator of value because it directly reflects what buyers are willing to pay in the market. The appraiser gives most weight to sales comparison in reconciliation. The cost and income approaches serve as checks on reasonableness.
Related Oregon Property Valuation Questions
- What is the 'principle of change' in Oregon real estate valuation?
- A licensed Oregon real estate appraiser must adhere to ethical and performance standards outlined in:
- In the income approach to value, what does the term 'capitalization rate' represent?
- Economic obsolescence (external obsolescence) differs from functional obsolescence in that economic obsolescence:
- Functional obsolescence in a property is BEST illustrated by:
- A property's NOI is $45,000 and the cap rate is 7.5%. Using the income approach, what is the indicated value?
- Which Oregon property type is MOST likely to be appraised using the income capitalization approach as the PRIMARY method?
- In the sales comparison approach, an 'arm's length transaction' is preferred because:
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