Property Valuation
A Virginia appraiser performing an 'as-improved' appraisal of a proposed new construction is appraising the property:
AIn its current vacant lot condition
BAs if the proposed improvements are complete and operational✓ Correct
CAt land value only
DAfter 5 years of occupancy
Explanation
An 'as-improved' (or 'as-completed') appraisal values the property assuming the proposed construction or renovations are complete. Lenders use this for construction loans.
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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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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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