Property Valuation
In South Dakota, the 'sales comparison approach' requires comparable sales to be:
AIdentical in all respects to the subject property
BFrom the same city or county as the subject property
CRecent, geographically proximate, and similar in relevant characteristics✓ Correct
DSold within the last 30 days
Explanation
Good comparables are recent (preferably within 6–12 months), located in the same market area, and similar in size, condition, features, and location to the subject property.
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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.
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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