Property Valuation Flashcards
7 cards from real SRS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Property Valuation flashcards as text
A duplex rents for $3,000 per month and the area gross rent multiplier (GRM) is 140. What is the estimated value?
Answer: $420,000
Value equals monthly gross rent times GRM: $3,000 × 140 = $420,000.
A property produces $36,000 net operating income and the market cap rate is 6%. What is its value?
Answer: $600,000
Value equals NOI divided by cap rate: $36,000 ÷ 0.06 = $600,000.
When is the cost approach most appropriate?
Answer: Valuing new construction or special-use property like a church
The cost approach works best when few comparables exist or the improvements are new.
Which adjustment is typically made FIRST when building an adjusted comparable grid?
Answer: Financing and conditions of sale
Transactional adjustments like financing and sale conditions come before market-time and physical adjustments.
A seller says, 'My neighbor's house listed at $650,000, so mine is worth that too.' The best response is to:
Answer: Explain that active listings are asking prices, not proof of value
Asking prices are unproven; closed sales show what buyers actually paid.
Market conditions in an area rose 0.5% per month. A comparable sold 6 months ago for $400,000. What is its time-adjusted price?
Answer: $412,000
0.5% × 6 = 3%; $400,000 × 1.03 = $412,000.
Which statement about a CMA versus an appraisal is TRUE?
Answer: A CMA helps set list price; an appraisal is an independent opinion of value often required for financing
Agents prepare CMAs for pricing strategy, while licensed appraisers produce appraisals for lenders.
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