ValuationAppraisal MethodsHARD
When a comparable sale used in an appraisal was not an arm’s length transaction, this affects the:
Correct Answer
C) highest and best use of the subject property.
Non-arm's length transactions require adjustment as they may not reflect true market value.
Answer Options
A
demand for the subject property.B
value of the subject property.C
highest and best use of the subject property.D
scarcity of the subject property.Audio Lesson3 min
Study Infographics
Why This Is the Correct Answer
Sign up free to unlock full analysis
Why the Other Options Are Wrong
Sign up free to unlock full analysis
Deep Analysis of This Valuation Question
Sign up free to unlock full analysis
Background Knowledge for Valuation
Sign up free to unlock full analysis
Sign up free to unlock full analysis
Real World Application in Valuation
Sign up free to unlock full analysis
Related Topics & Key Terms
Related Topics:
highest-and-best-use-analysissales-comparison-approachmarket-value-principlesappraisal-adjustments
Key Terms:
arm's length transactionhighest and best useUSPAPcomparable salesappraisal methodology
Was this explanation helpful?
More Valuation Questions
Example of economic obsolescence in real estate?
Who typically hires the appraiser in a real estate transaction?
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:
All of the following are one of the four important elements of value, except:
- → Under the replacement cost approach of appraisal, an appraiser is least interested in:
- → The appraisal process which allocates a percentage of a property’s total value to the land and a percentage to the improvements is known as:
- → Which Tennessee government body is primarily responsible for appraising real property for ad valorem tax purposes at the local level?
- → A property's value decreased because a noisy highway was built nearby. This is an example of:
- → Which of the following is the least important factor used to determine the market value of a property?
- → In Texas, a comparative market analysis (CMA) can be prepared by:
- → All of the following have a specific dollar value, except:
- → In which appraisal approach to value would the value for the land be calculated separately?
- → In Texas, functional obsolescence includes:
- → A capitalization rate of 8% on a property with $40,000 NOI indicates a value of: