An appraiser receives a copy of a signed sales agreement for an office building, which specifies the agreed-upon amount of $950,000. What does the figure represent?

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Study for the McKissock 15hr National USPAP Test. Use flashcards and multiple-choice questions with hints and explanations. Get ahead in your appraisal career!

Multiple Choice

An appraiser receives a copy of a signed sales agreement for an office building, which specifies the agreed-upon amount of $950,000. What does the figure represent?

Explanation:
The figure is the price—the contract price agreed by the buyer and seller for the property. It’s the amount the parties intend to exchange to transfer ownership under that signed agreement. It isn’t the cost (what it took to build or acquire), nor the appraiser’s value opinion, nor rent (no periodic payments are involved). The contract price can be higher or lower than market value, depending on negotiations and terms, and the appraiser would consider value separately from this contract price.

The figure is the price—the contract price agreed by the buyer and seller for the property. It’s the amount the parties intend to exchange to transfer ownership under that signed agreement. It isn’t the cost (what it took to build or acquire), nor the appraiser’s value opinion, nor rent (no periodic payments are involved). The contract price can be higher or lower than market value, depending on negotiations and terms, and the appraiser would consider value separately from this contract price.

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