Property Valuation
The sales comparison approach to value is most appropriate for:
ANew construction commercial buildings with unique features
BSingle-family residential properties with comparable sales✓ Correct
CIncome-producing properties with stable cash flows
DSpecialized properties that rarely sell
Explanation
The sales comparison approach (also called the market data approach) is most reliable for residential properties where sufficient comparable sales exist. Appraisers compare the subject property to recently sold similar properties and make adjustments for differences.
People Also Study
Related Pennsylvania Questions
- When making an adjustment in the sales comparison approach, if the comparable sale has a feature the subject lacks, the appraiser:Property Valuation
- When using the sales comparison approach, which factor would an appraiser adjust for if the comparable sold 18 months ago in a rising market?Property Valuation
- The sales comparison approach to value is most reliable when:Property Valuation
- When appraising a property using the sales comparison approach, a Pennsylvania appraiser adjusts comparable sales for differences in:Property Valuation
- A Pennsylvania income property has an annual NOI of $48,000. If the market cap rate for similar properties is 6%, what is the estimated value using the income approach?Real Estate Math
Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Study This Topic
Practice More Pennsylvania Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Pennsylvania Quiz →