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Article: Appraisal review tips for bankers: Part 5: Absolute value.(Commercial Real Estate)
- Article from:
- The RMA Journal
- Article date:
- December 1, 2005
- Author:
CopyrightCOPYRIGHT 2005 The Risk Management Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Remember when you learned the concept of absolute value, in which a number between two bars || represents the distance from "0" of a point on a number line? The absolute value is always a positive number (or zero). For example, | -2 | meant that value was "2."Of course, then | 2 | also was "2." I remember wondering, "When am I ever going to use this?"
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As it turns out, the appraisal review process is one such instance where absolute value has some applicability. When reviewing adjustments to the comparable sales in the comparable sales approach, you don't look only at the net effect of the adjustment--you also need to take into account the ...