Florida Real Estate Broker ExaminationValuation and Market AnalysisEasy
A real estate agent is preparing a Broker's Price Opinion (BPO) for a lender. The subject property is a 3-bedroom, 2-bathroom home built in 2005. Which of the following would be the MOST appropriate comparable property to select?
- AA 4-bedroom, 3-bathroom home built in 2010, located two miles away, sold six months ago.
- BA 2-bedroom, 1-bathroom home built in 2005, located in the same subdivision, sold three months ago.
- CA 3-bedroom, 2-bathroom home built in 2006, located three blocks away, sold last month.
- DA 3-bedroom, 2-bathroom home built in 1990, located one mile away, sold two months ago.
Show answer & explanationAnswer & explanation
Correct answer: C. A 3-bedroom, 2-bathroom home built in 2006, located three blocks away, sold last month.
The most appropriate comparable property is one that is most similar to the subject property in terms of physical characteristics, location, and recency of sale. Option B best fits these criteria.
Why the other options are wrong
- A. This comparable has different bedroom/bathroom count, newer age, and is farther away, requiring more adjustments.
- B. This comparable has fewer bedrooms and bathrooms, requiring significant adjustments for size and utility.
- D. This comparable is significantly older, which would require a large adjustment for age and condition.
Comparable Selection (Sales Comparison)
The process of identifying properties that are similar to the subject property in key characteristics and have recently sold in the market.
- Comparables should be as similar as possible to the subject property.
- Factors include location, size, age, condition, and sale date.
- The goal is to minimize the number and size of adjustments needed.
Memory trick: Similar homes make a clear market picture.