Property Valuation
In Tennessee, an appraiser who uses three comparable sales to value a property notes that the comps sold for $285,000, $291,000, and $288,000 after adjustments. What is the indicated value range?
A$285,000 to $291,000✓ Correct
B$288,000 exactly
C$285,000
D$291,000
Explanation
The value range indicated by the adjusted comparable sales is $285,000 to $291,000. The appraiser will reconcile within this range based on the quality and similarity of each comparable.
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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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