A licensed appraiser in California is appraising a home in a subdivision where half the homes are within a Mello-Roos Community Facilities District and half are not. The subject property is within the Mello-Roos district and pays $3,200 annually in special taxes. When selecting comparables, which approach is MOST appropriate under California appraisal standards?
Correct Answer
B) Select the best comparables regardless of Mello-Roos status and make appropriate adjustments for the special tax difference
Under USPAP and California appraisal practice, the appraiser should select the best available comparables based on overall similarity to the subject, regardless of Mello-Roos status. If a comparable is outside the Mello-Roos district, the appraiser adjusts for the difference in tax burden. This approach maximizes the pool of usable comparables while maintaining accuracy.
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Previous Question
A California real estate agent is preparing a CMA for a 3-bedroom home in Sacramento. Three comparable sales are identified: Comp A adjusted value $485,000, Comp B adjusted value $492,000, and Comp C adjusted value $478,000. Comp B required the fewest adjustments and is most similar to the subject. Following California appraisal practice, the agent reconciles by weighting Comp B at 50%, Comp A at 30%, and Comp C at 20%. What is the reconciled value estimate?
Next Question
A California appraiser is valuing a property in Irvine. Comparable #1 sold for $950,000 three months ago. The California market in this area has been appreciating at 0.5% per month. The comparable is NOT in a Mello-Roos district, but the subject IS in a Mello-Roos district paying $4,800 per year in special taxes. The appraiser determines that the present value of the Mello-Roos tax burden reduces value by $48,000. What is the time-and-Mello-Roos adjusted value of Comparable #1?