5. What is the rationale for the sales comparison approach? A. an informed inves

Question

5. What is the rationale for the sales comparison approach? A. an informed investor would never pay more for a property than other investors have recently paid B. in a relatively s price C. value of property is related to its ability to produce cash flow through sales D. the value of a property depends on its replacement cost hort period of time, comparable houses in the same area will always sell for the same 6. The text notes that higher market capitalization rates and therefore lower property values tend to be brough about by: A. unanticipated increase in the supply of real estate relative to demand B. unanticipated increase in interest rates C. both of the above D. none of the above

Explanation / Answer

5. In a sales comparison approach the worth of a property is estimated by comparing similar property deals that have happened in very recent time. Hence the answer here is B.

This also helps the sellers / agents to list their property in the same range in the given locality

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