Property Valuation & Appraisal Flashcards
6 cards from real BC Real Estate Trading Services Course practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Property Valuation & Appraisal flashcards as text
In BC, which method of property valuation estimates value by comparing the subject property to recently sold similar properties?
Answer: Direct comparison (sales comparison) approach
The direct comparison (sales comparison) approach estimates value by comparing the subject property to recent sales of comparable properties, making adjustments for differences.
The income approach to property valuation is most appropriate for:
Answer: Income-producing properties such as apartment buildings and commercial properties
The income approach estimates value based on the income the property generates. It is most suited for income-producing properties where buyers are primarily motivated by return on investment.
In BC real estate, 'market value' is best defined as:
Answer: The most probable price a property would sell for in an open, competitive market between informed, willing parties
Market value is the most probable price a property would sell for in an open market, with both buyer and seller acting knowledgeably, prudently, and without undue pressure.
In a direct comparison approach for a BC residential property, adjustments are made to:
Answer: The comparable sales prices to reflect the differences compared to the subject property
In the sales comparison approach, adjustments are made to the comparable sales prices (not the subject) to account for differences. If a comparable has a feature the subject lacks, the comparable price is adjusted downward.
BC Assessment values properties for tax purposes as of:
Answer: July 1 of the previous year (assessment roll date)
BC Assessment values properties as of July 1 of the previous year. These values are used to calculate property taxes for the following year's tax roll.
Which of the following is NOT a factor that directly affects residential property value in BC?
Answer: The original purchase price paid by the current owner
The original purchase price paid by the current owner does not directly affect current market value. Value is determined by current market conditions, not historical cost.