The sales comparison approach is usually given the most weight for:
Correct Answer
A) Owner-occupied residential property in an active market
Why this is correct: The correct answer, 'Owner-occupied residential property in an active market,' is correct because the sales comparison approach directly reflects the actions of typical buyers and sellers in such a market. Abundant, recent, and similar sales data make this approach highly reliable and typically the primary valuation method. Why the other choices are wrong: 'A special-purpose industrial facility' is wrong; the cost approach is often primary due to lack of comparable sales. 'A property with no recent comparable sales available' is wrong; without comparables, the sales comparison approach cannot be applied reliably. 'A newly constructed prototype building' is wrong; the cost approach is typically emphasized for new construction. Exam tip: Sales comparison gets the most weight when the market is active and the property type is commonly traded, like single-family homes.
Why This Is the Correct Answer
Why this is correct: The correct answer, 'Owner-occupied residential property in an active market,' is correct because the sales comparison approach directly reflects the actions of typical buyers and sellers in such a market. Abundant, recent, and similar sales data make this approach highly reliable and typically the primary valuation method. Why the other choices are wrong: 'A special-purpose industrial facility' is wrong; the cost approach is often primary due to lack of comparable sales. 'A property with no recent comparable sales available' is wrong; without comparables, the sales comparison approach cannot be applied reliably. 'A newly constructed prototype building' is wrong; the cost approach is typically emphasized for new construction. Exam tip: Sales comparison gets the most weight when the market is active and the property type is commonly traded, like single-family homes.
More Sales Comparison Questions
Excess land differs from surplus land in that excess land:
A paired sales analysis reveals that homes with stainless-steel appliances sell for $2,100 more than identical homes with standard appliances — but only when the homes are priced below $350,000. In the subject’s neighborhood, median sale price is $410,000. What is the appraiser’s obligation regarding the $2,100 appliance adjustment?
GLA differs by 210 sq ft between subject and comparable. Paired sales support $65 per sq ft of living area. The line adjustment is:
Paired sales are drawn from transactions six months apart in a stable market. The time adjustment needed is:
The most appropriate unit of comparison is determined by:
A comparable superior to the subject in every adjusted category should produce an indication that is:
Three sales support $520,000; the borrower's purchase contract is $505,000. May the appraisal conclude above the contract price?
A comparable sold for $300,000 with the seller carrying a loan 2 points below market, a benefit worth $8,000. What is its cash-equivalent price?
Why is a foreclosure sale generally a poor comparable in a stable market?
A comparable sold 8 months ago for $250,000 in a market appreciating 6% per year. What is the time-adjusted price?
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