Property Valuation
An appraiser notes that a comparable sale in Providence included personal property (appliances) valued at $5,000. To use this sale as a comparable, the appraiser must:
AReject the sale as unusable
BAdjust the sale price downward by $5,000✓ Correct
CAdjust the sale price upward by $5,000
DAdd $5,000 to the subject property value
Explanation
If a comparable sale included personal property that inflated the price, the appraiser must adjust the comparable's sale price downward by the value of the personal property to extract the real estate value only.
People Also Study
Related Rhode Island Questions
- An appraiser in Warwick, RI, notes that a comparable sale occurred 6 months ago in a market that has appreciated 2% over those 6 months. What type of adjustment is needed?Property Valuation
- When a Rhode Island appraiser estimates the value of a duplex using the gross rent multiplier method, they divide the sale price of comparables by their annual gross rents to derive the GRM. The subject property has annual gross rents of $30,000 and the market GRM is 12. What is the indicated value?Property Valuation
- An appraiser in Providence uses three comparable sales. The first indicates $400,000, the second $410,000, and the third $390,000. The appraiser gives the most weight to the best comparable. If the third comp is most similar to the subject, what final value might the appraiser conclude?Property Valuation
- A comparable property sold 8 months ago. The market has appreciated 1% per month since that sale. The comparable's adjusted price for market conditions (time adjustment) should be:Property Valuation
- An appraiser finds three comparable sales at $305,000, $318,000, and $299,000 after adjustments. If reconciled to the average, what is the indicated value?Real Estate Math
- A Rhode Island appraiser finds two comparable sales: one is 10% larger than the subject property and sold for $330,000, while another is 5% smaller and sold for $290,000. Assuming a linear relationship, what would the adjusted value of the larger comp be per additional square foot if the subject is 1,500 sq ft?Real Estate Math
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.
Study This Topic
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →