SRS Property Valuation 4

Question 1

A duplex rents for $3,000 per month and the area gross rent multiplier (GRM) is 140. What is the estimated value?

Accepted Answer

$420,000

Answer

Value equals monthly gross rent times GRM: $3,000 × 140 = $420,000.

Question 2

A property produces $36,000 net operating income and the market cap rate is 6%. What is its value?

Accepted Answer

$600,000

Answer

Value equals NOI divided by cap rate: $36,000 ÷ 0.06 = $600,000.

Question 3

When is the cost approach most appropriate?

Accepted Answer

Valuing new construction or special-use property like a church

Answer

The cost approach works best when few comparables exist or the improvements are new.

Question 4

Which adjustment is typically made FIRST when building an adjusted comparable grid?

Accepted Answer

Financing and conditions of sale

Answer

Transactional adjustments like financing and sale conditions come before market-time and physical adjustments.

Question 5

A seller says, 'My neighbor's house listed at $650,000, so mine is worth that too.' The best response is to:

Accepted Answer

Explain that active listings are asking prices, not proof of value

Answer

Asking prices are unproven; closed sales show what buyers actually paid.

SRS - Seller Representative Specialist Practice Test