A California real estate agent is preparing a CMA for a property that borders a newly expanded CEQA-designated habitat area. One comparable also borders the designation, which restricts development on adjacent land. How should the agent address this environmental factor when analyzing the comparable?
Correct Answer
B) Consider the CEQA habitat designation as a location factor that may positively or negatively affect value depending on buyer perceptions and local market data
CEQA (California Public Resources Code §21000 et seq.) habitat designations can affect property values in either direction. Some buyers value proximity to protected natural areas (positive impact), while others are concerned about development restrictions or wildlife issues (negative impact). The agent should consider the specific impact based on local market data and buyer behavior rather than applying a blanket positive or negative adjustment.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Property Valuation Financial Analysis Question
Background Knowledge for Property Valuation Financial Analysis
Real World Application in Property Valuation Financial Analysis
Common Mistakes to Avoid on Property Valuation Financial Analysis Questions
Related Topics & Key Terms
Key Terms:
Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
More Property Valuation Financial Analysis Questions
Example of economic obsolescence in real estate?
Which appraisal report type do California lenders commonly rely on for single-family residence financing?
Return of an investor’s investment is provided for through:
Under California law, when a real estate licensee prepares a Comparative Market Analysis (CMA) for a property, what is the legal distinction between a CMA and a formal appraisal?
Owner converted master bedroom into 'granny flat' costing $50,000 but adding $30,000 value. Later, kitchen remodel cost $15,000 but added $20,000 value. Which statement is correct?
- → The appraisal approach that estimates value by comparing a property to similar recently sold properties is the:
- → The period of time a structure continues to earn sufficient income to continue operations is referred to as the structure’s:
- → An appraiser in California is using the cost approach for a property in Sacramento and must account for entrepreneurial profit (also called developer's profit). A local developer confirms that typical profit margins in the Sacramento market are 15-20% of total development costs. How should the appraiser handle entrepreneurial profit?
- → A California buyer's agent is reviewing comparable sales data and notices that the county recorder's office lists different documentary transfer tax amounts for similar properties in the same city. Some properties show both a county and city transfer tax, while others show only the county tax. What does this difference indicate about the sale verification process?
- → When conducting a sales comparison analysis in California, an appraiser discovers that the subject property has an Accessory Dwelling Unit (ADU) that was built under California's recent ADU legislation. How should the appraiser handle this feature?
- → A California real estate agent is selecting comparable sales for a CMA on a property in Fresno. The agent finds a sale from 14 months ago in the same neighborhood. Under standard California CMA practice, why might the agent hesitate to use this comparable?
- → A California real estate licensee is preparing a CMA and notices that one comparable property sold in a foreclosure auction conducted by a trustee under a deed of trust. How should this sale be handled in the CMA?
- → Compared to other appraisal factors, appraisers generally find the the most difficult calculation to measure precisely.
- → When a comparable sale used in an appraisal was not an arm’s length transaction, this affects the:
- → A property’s cost basis is most affected by an owner’s:
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Related Articles
Property Flyer Generator — 2026 Guide for U.S. Agents: Step-by-Step + Best Practices
Learn how Property Flyer Generator works and how U.S. real estate agents use it in 2026. Includes setup steps, practical examples, and best-practice tips.
Real Estate Exam Property Ownership & Title (2026): Deeds, Liens, Encumbrances + Practice Questions
Understand deeds, liens, encumbrances, and ownership types with exam-style practice questions and traps.
Property Landing Page — 2026 U.S. Agent Guide: Setup, Use Cases & Pro Tips
Learn how Property Landing Page works and how U.S. real estate agents use it in 2026. Includes setup steps, practical examples, and best-practice tips.
Previous Question
An appraiser in California is valuing a property and one comparable was a sale-leaseback transaction where the seller sold the property and immediately leased it back from the buyer at above-market rent. The recorded sale price was $800,000. Under California appraisal practice, how should the appraiser handle this comparable?
Next Question
A California buyer's agent is reviewing comparable sales data and notices that the county recorder's office lists different documentary transfer tax amounts for similar properties in the same city. Some properties show both a county and city transfer tax, while others show only the county tax. What does this difference indicate about the sale verification process?