Chapter 1
Property Rights and Interests
Course: Texas Real Estate Exam Prep
Subject: Texas State Salesperson Exam Prep
Chapter: Appraisal And Valuation Of Texas Real Estate Salesperson Exam Prep
Three Approaches to Value
- Sales Comparison Approach
Best For: Residential properties (abundant comparable sales)
Process:
- Find comparable sales (recently sold, similar properties)
- Analyze differences between comparables and subject
- Adjust comparable sales prices
- Reconcile to estimate value
Adjustments:
- If comparable is superior: Subtract from comp's price
- If comparable is inferior: Add to comp's price
- Goal: Make comps equal to subject
Texas Example - Dallas Home:
Subject Property:
- 2,500 sq ft
- 4 bed / 3 bath
- 2-car garage
- Pool
- Upgraded kitchen
Comparable Sales:
Comp 1: Sold $450,000
- 2,500 sq ft (same)
- 4 bed / 2 bath (one less bath: +$5,000)
- 2-car garage (same)
- No pool (+$25,000)
- Standard kitchen (+$10,000)
- Adjusted Price: $490,000