Property Valuation
A Wisconsin appraiser who adjusts a comparable sale for 'location' is accounting for the fact that:
AThe comparable is in a different state
BProperties in different neighborhoods or with different site-specific location advantages have differing market values✓ Correct
CAll comparables must be in the same zip code
DLocation adjustments are prohibited under USPAP
Explanation
Location adjustments reflect the market's recognition that different locations command different prices — proximity to amenities, school districts, traffic, and neighborhood quality all affect value.
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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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