The sales comparison approach to appraisal is most commonly used for which type of property?
Correct Answer
B) Residential properties with available comparable sales data
The sales comparison approach is most reliable and commonly used for residential properties because a sufficient number of recent, comparable sales (comps) are typically available in the market. The appraiser identifies similar properties that have recently sold, then makes adjustments for differences in features, location, and condition to arrive at an estimated value. This approach is less useful for unique or special-use properties, which lack comparable sales, and for income-producing properties, where the income approach is generally preferred.
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Related Concepts
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.
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.
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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?
- → 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?
- → Which four criteria must ALL be met for a use to qualify as the highest and best use of a property?
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