Tennessee Real Estate License Exam Practice Question
Which of the following methods uses recent sales as the only factor to arrive at a value estimate?
Correct Answer: B
Rationale: The sales comparison method relies solely on recent sales data of similar properties to determine value, making it the most accurate choice for this question.
Option A, cost, evaluates value based on the cost to replace or reproduce a property, considering construction costs and depreciation, rather than sales data.
Option C, income, focuses on the income-generating potential of a property, calculating value based on expected revenue rather than past sales.
Option D, capitalization, involves converting income into value using a capitalization rate, which again does not rely on recent sales figures.
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