A California appraiser is valuing a condominium in downtown San Diego. Under Proposition 19 (effective February 2021), certain intergenerational transfers may receive partial reassessment exclusions. The appraiser identifies a comparable condo that was a parent-to-child transfer where the child received a Prop 19 exclusion. The child subsequently sold the condo six months later at market value. Should the appraiser use this subsequent sale as a comparable?
Correct Answer
A) Yes, because the subsequent arm's-length sale to an unrelated party reflects current market value regardless of the prior Prop 19 transfer
The subsequent sale by the child to an unrelated third party at market value is an arm's-length transaction that reflects current market conditions. The prior Prop 19 parent-to-child transfer and its reassessment exclusion relate only to property tax assessment and have no effect on the market value established by the subsequent sale. This comparable is valid for the sales comparison approach.
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Previous Question
A California appraiser is valuing a residential rental property in a market where AB 1482 (Tenant Protection Act) applies. Recent comparable sales include properties purchased by investors at prices reflecting the income stream from existing tenancies, and properties purchased by owner-occupants who acquired vacant possession. The subject property is tenant-occupied. How should the appraiser handle this market condition in the sales comparison approach?
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An appraiser in California is using the cost approach to value a newly constructed home in a master-planned community in the Inland Empire. Under California appraisal practice, which type of cost estimate is MOST commonly used for a recently built residential property?