Property Valuation
Absorption rate in Utah real estate market analysis measures:
AThe rate at which building materials absorb moisture
BThe rate at which available homes are sold in a specific area over a given period✓ Correct
CThe percentage of buyers who obtain financing
DThe rate of property tax collection
Explanation
Absorption rate measures how quickly available homes sell in a market—homes sold per month ÷ total active listings = months of supply. A lower number means a faster market (seller's market); higher means slower (buyer's market).
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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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
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