PSI Oklahoma Real Estate Practice Test

In property appraisal, which statement best describes 'comparable properties'?

1. Properties of identical value

2. Properties in the same neighborhood

3. Properties that can be adjusted to reasonably match the subject property

4. Properties sold within the last month

The correct answer is: Properties that can be adjusted to reasonably match the subject property

Comparable properties are defined as those that can be adjusted to reasonably match the subject property being appraised. This concept is central to the comparative market analysis method used in property appraisal. When valuing a property, it's essential to consider properties that share similarities with the subject property, such as size, location, amenities, and condition. However, due to variations like differences in features or market conditions, appraisers often make adjustments to better align these comparable properties with the subject property. This process enables appraisers to arrive at a fair market value based on realistic comparisons. While it’s beneficial for comparable properties to be in the same neighborhood or recently sold, simply being identical in value or having recent sales does not ensure they are suitable for appraisal purposes. The focus on adjustability makes option C the most accurate definition in the context of property appraisal.