Property Valuation
What is a 'drive-by appraisal' (exterior-only inspection), and when might it be used in Pennsylvania?
AAn appraisal conducted by a non-licensed estimator for insurance purposes
BAn appraisal with exterior inspection only, used for low-risk refinances or when interior access is unavailable✓ Correct
CAn automated valuation with no physical inspection, used for all refinance transactions
DA preliminary estimate provided before listing to help sellers price their home
Explanation
A drive-by appraisal involves only an exterior inspection of the property (the appraiser does not enter). It may be used for low-risk refinance transactions, equity loans, or when interior access is not available.
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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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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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