Question

An appraiser who is using the sales comparison approach to value would NOT use which of the following similar homes as comparable properties? One that was

a. sold over six months ago

b. sold recently but is located in another similar neighborhood

c. sold by the owners who were undergoing a foreclosure

d. sold recently but is located on a much larger lot

Answer 1

An appraiser using the sales comparison approach would not use a property that was sold over six months ago as a comparable because the real estate market conditions can change significantly over time. The correct option is A.

Step-by-step explanation:

An appraiser using the sales comparison approach to value a property would ideally use comparable properties that are similar to the subject property in size, location, and condition and that have been sold recently. Therefore, the comparable property that would NOT be used is one that was sold over six months ago.

This is because real estate markets can change significantly over time, and sales that occurred too far in the past may not accurately reflect the current market conditions. Comparables sold recently even if they are in a different, but similar neighborhood, undergoing a foreclosure, or located on a much larger lot, can still be adjusted for differences to derive a value for the subject property. However, the timing of the sale is crucial for an accurate assessment.