Origination ActivitiesQuestion 248 of 400
An appraiser uses the sales comparison approach on a single-family home. This approach primarily estimates value by:
a.Calculating the cost to rebuild the home new, less depreciation
b.Comparing the subject to recent sales of similar nearby properties with adjustments
c.Dividing net operating income by a capitalization rate
d.Using only the original purchase price of the home
Explanation
The sales comparison approach estimates value by comparing the subject property to recent sales of similar homes, adjusting for differences in features, size, and condition. The cost approach rebuilds less depreciation, and the income approach capitalizes income, both used more in other property types.
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