The appraisal approach that estimates value by comparing a property to similar recently sold properties is the:
Question & Answer
Review the question and all answer choices
Cost approach
The cost approach (A) estimates value by calculating what it would cost to rebuild the property minus depreciation. It doesn't compare to recently sold properties, making it incorrect for this question.
Income approach
The income approach (B) estimates value based on the property's income-generating potential, not by comparing to recently sold properties. It's used primarily for investment properties.
Sales comparison approach
Gross rent multiplier approach
The gross rent multiplier approach (D) is a simplified income valuation method that uses rental income to estimate value, not comparison to recently sold properties.
Why is this correct?
The sales comparison approach (C) is correct because it specifically estimates value by analyzing recent sales of comparable properties and making adjustments for differences in characteristics, locations, and conditions. This directly matches the description in the question.
Continue Learning
Explore this topic in different formats
More Valuation & Appraisal Videos
Continue learning with related video lessons
All of the following affect real estate values in subsequent years, except:
2:41 • 0 views
What type of depreciation is the most challenging to correct?
3:28 • 0 views
An important characteristic of land is that it may be modified or improved. Such improvements tend to increase the value of real estate. Which of the following is NOT an improvement?
2:07 • 0 views
In Texas, a comparative market analysis (CMA) can be prepared by:
3:18 • 0 views
In Florida, the sales comparison approach is most commonly used for:
3:15 • 0 views
Ready to Ace Your Real Estate Exam?
Access 2,000+ free video lessons covering all 11 exam topics.