### Why is the Sales Comparison Approach reliable? - [ ] It uses hypothetical prices. - [x] It relies on actual market transactions. - [ ] It is based purely on cost calculations. - [ ] It does not need any adjustments. > **Explanation:** The Sales Comparison Approach is reliable because it uses actual market transactions to derive the estimated property value. ### What is a 'comparable' in the Sales Comparison Approach? - [ ] A property that has the same owner as the subject property. - [ ] The property used primarily for comparison articles. - [x] A similar property that has recently sold in the same area. - [ ] Any random property within a 50-mile radius. > **Explanation:** A comparable is a property that is similar to the subject property and has recently sold in the same area. ### Which of the following adjustments might need to be made when comparing properties? - [ ] Date of sale - [ ] Size of property - [ ] Number of amenities - [x] All of the above > **Explanation:** Adjustments may be needed for the date of sale, size of the property, and number of amenities to better compare the subject property to the comparables. ### What is the purpose of making adjustments to the sale prices of comparables? - [ ] To inflate market prices. - [ ] To make the subject property appear more valuable. - [x] To account for differences in characteristics. - [ ] To confuse potential buyers. > **Explanation:** Adjustments are made to account for differences in characteristics between the comparables and the subject property to provide an accurate valuation. ### How is the final value of a subject property determined using the Sales Comparison Approach? - [ ] By averaging the listing prices of all comps. - [ ] By selecting the highest comparable sale price. - [x] Through the adjusted sales prices of comparable properties. - [ ] By client preference. > **Explanation:** The final value is determined based on the adjusted sales prices of comparable properties after necessary adjustments are made. ### Can the Sales Comparison Approach be utilized for commercial properties? - [x] Yes, though it's most common in residential appraisals. - [ ] No, it's exclusively for residential properties. - [ ] Sometimes, depends on the location. - [ ] No, it can only be used for land. > **Explanation:** Although the Sales Comparison Approach is most common for residential properties, it can also be applied to commercial properties. ### What is an appraiser's role in selecting comparables? - [ ] They choose any property in the vicinity. - [ ] They prioritize properties with the highest value. - [x] They carefully select properties similar to the subject property. - [ ] They do not participate in selecting comparables. > **Explanation:** An appraiser carefully selects properties that are similar to the subject property to ensure accurate valuation. ### How does market condition influence the adjustment process? - [x] Changing market conditions may require date of sale adjustments. - [ ] Market conditions are irrelevant. - [ ] Only recent sales matter with no regard to market changes. - [ ] By making adjustments based on personal judgment. > **Explanation:** Market conditions can influence the appraisal, and adjustments might be necessary to account for changes in market conditions over time. ### What is meant by ‘adjusted sales price’? - [ ] A setting in financial software. - [ ] The original sale price unaltered. - [ ] The listing price of unsold properties. - [x] The sale price of a comparable, adjusted for various differences. > **Explanation:** Adjusted sales price refers to the sale price of a comparable after modifications have been made for differences between it and the subject property. ### What information is crucial for the Sales Comparison Approach to work effectively? - [ ] Only the number of bedrooms. - [x] Recent sale prices of similar properties. - [ ] The decoration style of houses. - [ ] The future market predictions. > **Explanation:** Accurate and recent sale prices of similar properties are crucial for the Sales Comparison Approach to work effectively.