California Real Estate Practice Exam

When appraising residential properties, an appraiser should carefully examine which of the following?

1. Comparable homes currently for sale

2. Comparable homes recently for sale, but not sold

3. Comparable homes recently sold, escrow's being closed

4. All of the above

The correct answer is: Comparable homes currently for sale

The most comprehensive approach to appraising residential properties involves examining comparable homes recently sold, as they provide the most relevant data when determining a property's market value. This reflects the actual transaction prices that buyers have recently paid, offering insight into current market conditions. While currently for sale properties can indicate market trends, they do not reflect confirmed sales or actual market value. Similarly, recently sold homes that remain in escrow are not definitive indicators of value since the transaction has not yet been completed. Thus, focusing solely on comparable homes currently on the market does not provide a complete picture of the market dynamics. By considering all comparable sales that have recently closed, appraisers can derive more accurate and reliable valuations based on real transactions, rather than assumptions or pending sales. Therefore, the best practice is to analyze all available comparable data to appraise residential properties effectively.