A licensee in Fort Lauderdale is preparing a BPO and finds these comparable sales: Sale 1: $425,000 (sold 2 months ago), Sale 2: $445,000 (sold 4 months ago), Sale 3: $410,000 (sold 6 months ago). If the market has been appreciating at 0.5% per month, what should be the adjusted value of Sale 3?
Correct Answer
B) $422,300
Correct: Sale 3 needs 6 months of appreciation adjustment: $410,000 × (1 + 0.005)^6 = $410,000 × 1.03 = $422,300. Why not A: This doesn't include any time adjustment. Why not C: This is insufficient appreciation adjustment. Why not D: This applies too much appreciation adjustment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
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All of the following information should typically be included in a Florida CMA EXCEPT:
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Assume a Florida homestead is subject to a 3% Save Our Homes cap for the coming year. If last year's assessed value was $180,000, what is the capped assessed value before any exemption is subtracted?