Property Valuation
Paired sales analysis is used by appraisers to:
AFind the average value of a neighborhood
BIdentify the market value contribution of a specific property feature by comparing two similar sales differing only in that feature✓ Correct
CDetermine depreciation rates
DCalculate the cap rate from multiple income properties
Explanation
Paired sales analysis isolates the value contribution of a specific feature by finding two very similar sales that differ in only that one characteristic. The price difference between the two sales indicates the market's value for that feature.
Related Rhode Island Property Valuation Questions
- What is 'assemblage value' (plottage increment) in Rhode Island?
- A Rhode Island appraiser makes a 'negative' adjustment to a comparable sale. This means:
- The 'arm's length transaction' assumption in appraisal means that:
- A property listed for $375,000 receives an appraisal of $355,000. The most likely outcome is:
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- Capitalization rate (cap rate) is used in the income approach and is calculated as:
- When comparing sales in Rhode Island's Newport market, an appraiser finds a waterfront home sold for significantly more than non-waterfront homes. This premium is captured through:
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