In the sales comparison approach to appraisal, when a comparable property is superior to the subject property in a particular feature, the appraiser should:
Correct Answer
B) Subtract the adjustment amount from the comparable property's sale price
In the sales comparison approach, adjustments are always made to the comparable properties, never to the subject property. When a comparable is superior to the subject in a given feature, the appraiser subtracts the adjustment amount from the comparable's sale price (because the comparable sold for more due to that superior feature). Conversely, when a comparable is inferior to the subject, the appraiser adds the adjustment amount to the comparable's sale price. The goal is to adjust each comparable to make it equivalent to the subject property.
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Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
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- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → Which formula best represents the cost approach to appraisal?
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