Property Valuation
In South Dakota, an appraiser's 'scope of work' determination considers:
AOnly the intended use of the appraisal
BThe intended use, intended users, type of value, effective date, and property characteristics to determine what analysis is appropriate✓ Correct
COnly the lender's requirements
DOnly what the property owner requests
Explanation
Scope of work under USPAP is determined by considering the intended use, intended users, type of value being sought, effective date, and property-specific factors. The appraiser must do enough work to produce credible results.
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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.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
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.
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