Property Valuation
An appraisal report in Pennsylvania is typically prepared by a licensed or certified appraiser. The term 'market value' means:
AThe price the seller wants to receive
BThe price the buyer is willing to pay
CThe most probable price a property would bring in an arm's-length transaction between informed buyers and sellers✓ Correct
DThe assessed value determined by the county
Explanation
Market value is the most probable price a property would command in an open market between knowledgeable buyers and sellers, each acting prudently and without undue pressure. It differs from the assessed value used for tax purposes.
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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.
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
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