California Real Estate Salesperson Exam Practice – Quesiton 11

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Question

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One of the chief advantages of the market data approach in the appraisal of real property is that:

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Selections

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• A. It is the easiest method for a salesperson to learn and use

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• B. It is less time consuming

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• C. A great number of comparable properties are always available

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• D. Selling prices are always available at the county recorder’s office

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Answer: A

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5 Keys Summary

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1. The market data approach is considered the most accessible valuation option for new or inexperienced real estate agents.

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2. This approach is widely used because it is very similar to preparing a Comparative Market Analysis (CMA) report, a routine task for agents to determine a listing price.

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3. Unlike the cost approach, the market data method does not require an agent to have specialized knowledge regarding construction bids, costs, or materials.

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4. It is generally simpler than the income approach, which requires experience in property management or leasing to predict future income potential.

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5. The market data approach is recognized as the most popular and reliable method for comparing and valuing residential real estate.

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