Property Valuation
A Vermont ski chalet with a view premium would be appraised with a positive adjustment because:
AAll Vermont properties have view premiums
BComparable sales without view premiums would be adjusted upward to account for the subject's superior view✓ Correct
CView premiums reduce value in ski markets
DThe adjustment is always exactly 10% in Vermont
Explanation
When a subject property has a feature (like a view) that comparable sales lack, the appraiser adds a positive adjustment to the comparables to bring their adjusted value up to the subject's level.
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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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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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