Property Valuation
An appraisal 'adjustment' for a superior feature in a comparable property is always:
APositive — adding to the comp's value
BNegative — subtracting from the comp's adjusted price✓ Correct
CApplied to the subject property, not the comparable
DExpressed as a percentage of the comp's sale price only
Explanation
In the sales comparison grid, adjustments are applied to the comparable sale to make it equivalent to the subject. If the comp is superior (has a feature the subject lacks), a negative adjustment subtracts from the comp's price.
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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.
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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