Certified Residential Appraiser Practice Exam

The Market Extraction Method primarily relies on what resource?

1. Property tax assessments

2. Comparable sales data

3. Rent schedules of similar properties

4. Property maintenance records

The correct answer is: Comparable sales data

The Market Extraction Method is predominantly based on comparable sales data because it involves analyzing sales prices of similar properties that have recently sold in the same market. This method allows appraisers to extract information about market trends, pricing, and value adjustments by directly observing what buyers have recently paid for similar properties in a specific area. By focusing on these sales, appraisers can determine how certain features, such as location, size, and condition, affect the overall value in a consolidated manner. Other resources listed, like property tax assessments, rent schedules, and property maintenance records, serve different purposes and measure different aspects of value. While they can provide valuable insights into the real estate market or individual property characteristics, they do not directly reflect current market transactions as effectively as comparable sales data. Therefore, the Market Extraction Method's heavy reliance on these real-world sales transactions makes it a robust tool for establishing property value in the context of current market dynamics.