Property Valuation
A Utah seller-financed transaction may be appraised at a price higher than market value if the financing terms are below market. An appraiser should:
AUse the inflated sale price as a comparable without adjustment
BAdjust for cash equivalency to reflect what the price would be at market financing terms✓ Correct
CIgnore seller-financed sales entirely
DUse only the seller's opinion of value
Explanation
When below-market seller financing inflates the sale price, appraisers must adjust for cash equivalency—determining what the property would sell for in a typical market-rate financing scenario.
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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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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