A property sold for $800,000 but had a non-typical financing arrangement with a below-market interest rate. How should this be treated in a CMA?
Correct Answer
C) Adjust the sale price downward to reflect market financing terms
Sales with non-typical financing terms must be adjusted to reflect what the property would have sold for under normal market financing conditions. Below-market financing artificially inflates the sale price, so a downward adjustment is necessary for accurate comparison.
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A property sold for $450,000 and generates annual net operating income of $27,000. What is the capitalization rate?
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A real estate agent is preparing a CMA for a 2,000 square foot bungalow. A comparable property sold for $450,000 but has an additional 300 square feet. If the adjustment is $150 per square foot, what is the adjusted sale price of the comparable?