An appraiser is valuing a property where the highest and best use as vacant is different from the current use. In this situation, the appraiser should:
Correct Answer
D) Compare supported as-improved alternatives with as-vacant use and conversion costs
Consider both land as though vacant and the actual property as improved. Compare supported continued use, alteration and removal after all conversion costs, timing and risk. Do not add incompatible components, mechanically average alternatives or select the highest unadjusted figure.
Why This Is the Correct Answer
Consider both land as though vacant and the actual property as improved. Compare supported continued use, alteration and removal after all conversion costs, timing and risk. Do not add incompatible components, mechanically average alternatives or select the highest unadjusted figure.
More Market Questions
Which stated cause of supported value loss is external?
Improvement cost new is $450,000. Separately supported improvement depreciation deductions of $45,000, $25,000, $15,000 are expressly nonoverlapping and not already excluded from cost new. Add supported site value of $125,000, already reflecting any site losses. What total indicated value results?
Which two depreciation categories may each be classified as curable or incurable by comparing the cost to remedy a deficiency with the value gained?
Improvement cost new is $800,000. Separately supported improvement depreciation deductions of $120,000, $80,000, $40,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
The principle of anticipation in real estate valuation states that:
Which highest-and-best-use criterion addresses whether a proposed use is allowed by zoning and applicable legal restrictions?
Three comparables produce adjusted indications of $312,000, $309,000 and $315,000, requiring gross adjustments of 9%, 14% and 22% respectively. Verification also establishes that the first sale is the closest competitive substitute and its adjustments are better supported than the other two. Which indication deserves the most weight on those facts?
When reconciling value indications from the three approaches to value, an appraiser should:
A property sold at a cash-equivalent price of $1,062,500. Its stabilized annual NOI is $85,000. What is the indicated overall rate?
In reconciliation, an appraiser should:
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A comparable cash price is $295,000. Its superior location requires a supported downward adjustment expressly equal to 6% of that COMPARABLE price. What adjusted price results? This is not a statement that its price equals 106% of a lower subject-location price.
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A comparable’s cash price is $340,000. It requires a 4% time increase first, then a −$12,000 physical adjustment already expressed at the effective date. What is the adjusted price?