Property Valuation
In South Dakota, when an appraiser analyzes the 'subject property's' location, which factor typically has the greatest impact on residential property value?
AProximity to employment centers and quality of local schools✓ Correct
BThe color of the property's exterior paint
CThe age of the roof
DThe number of bathrooms
Explanation
Location is traditionally the most important factor in residential real estate value. Proximity to employment, quality of schools, access to services, and neighborhood characteristics tend to be the dominant location factors.
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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.
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