Georgia Real Estate Salesperson Exam — All Questions

An appraiser is valuing a new special-purpose building, such as a church, with few comparable sales. Which approach is most appropriate?

• a.Cost approach✓
• b.Sales comparison approach
• c.Gross rent multiplier
• d.Income capitalization approach

The cost approach is best for special-purpose or newer properties that rarely sell and produce no income, because it estimates replacement cost minus depreciation plus land value. Comparable sales and income data are scarce for such properties.

When an appraiser adjusts for differences between a comparable property and the subject, adjustments are always made to the:

• a.Subject property's value
• b.Both properties equally
• c.Comparable property's sale price✓
• d.Listing price of the subject

In the sales comparison approach, adjustments are made to the comparable properties, never to the subject. If the comparable is superior, its price is adjusted downward; if inferior, upward.