Property Valuation
Vermont's seasonal vacation home market creates which appraisal challenge?
AAll Vermont homes are seasonal, so no challenge exists
BSeasonal demand fluctuations and limited comparable sales may require appraisers to use paired sales analysis and paired market data carefully✓ Correct
CThe IRS prohibits appraising seasonal properties
DAct 250 sets maximum values for vacation homes
Explanation
Vermont's vacation/seasonal market — ski homes, lake cottages, foliage-season retreats — often has thin sales data and price volatility tied to seasonal demand. Appraisers must carefully select seasonal comparable sales and may need to explain market conditions and seasonal adjustments in their reports.
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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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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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