Question

In the market data approach, an appraiser

1.selects comparable properties, adjusts the comparables, and estimates the value.
2.identifies the price previously paid, applies an appreciation rate, and estimates the value.
3.gathers relevant price data, applies the data to the subject, and estimates the value.
4.chooses nearby comparables adjusts the subject for differences and estimates the value.

Answer 1

In the market data approach, an appraiser selects comparable properties, adjusts for differences, and estimates the subject property's value using the median price and price variation.

Step-by-step explanation:

In the market data approach of property valuation, an appraiser undertakes several steps to estimate the value of a subject property. Generally, the process involves the following:

• Selecting comparable properties that have recently been sold.
• Making adjustments to these comparables to account for any differences from the subject property, such as location, size, condition, and features.
• Estimating the market value of the subject property based on these adjusted comparables.

Once a data collection on property values is acquired, the appraiser might look at the median price and the variation of prices to help account for outliers and provide a more accurate estimate of the subject property's value. Furthermore, tracking changes in pricing, such as inflation, is necessary to adjust nominal values to real values, which gives a clearer picture of the property’s value over time.