exam 2 busm

Question 1

market value

Answer 1

defined by real estate appraisers as most probable selling price, assuming normal sale conditions

Question 2

transaction prices

Answer 2

prices observed on sold properties

used to estimate MV of similar properties

Question 3

highest and best use

Answer 3

use found to be
1. legally permisible
2. financially feasible
3. physically possible

overall: MV of a property is a function of its most productive use

property valued at highest and best use

Question 4

reconciliation

Answer 4

appraiser’s subjective opinion; weighs methods and gives weighted composite

Question 5

sales comparison approach

Answer 5

comparing subject property with comparable properties that have sold recently

assume: close substitutes for similar price

want to find closest (location), most similar (type), most recent (time)

selecting comps:
- MLS
- public records

arms length transactions: a fairly neogtiated transaction