Property Valuation
An appraiser in Virginia applies the 'paired sales analysis' technique to determine the market adjustment for a swimming pool. This means:
AAveraging the values of all pool homes
BFinding two similar sales that differ only in the presence of a pool and calculating the value difference✓ Correct
CEstimating the replacement cost of the pool
DUsing the income approach for pool-related rental premium
Explanation
Paired sales analysis isolates the value contribution of a single feature by finding two otherwise identical sales that differ only in that feature (e.g.
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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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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