Real Estate Appraisal Flashcards

Real Estate Appraisal Flashcards All of the following factors would be important in comparing properties under the sales comparison approach to value EXCEPTA) differences in original cost.B) differences in dates of sale.C) differences in appearance and condition.D) differences in financing terms.

• differences in original cost.

The owners of a modest ranch house in a neighborhood of larger, more expensive homes may find that the value of their home is affected by what principle?A) ProgressionB) RegressionC) Increasing returnsD) Competition

• Progression

From the reproduction or replacement cost of a building, the appraiser deducts depreciation, which representsA) costs to modernize the building.B) the remaining economic life of the building.C) loss of value due to any reason.D) remodeling costs to increase rentals.

• loss of value due to any reason.

An appraiser asked for an opinion of the value of an existing shopping center would probably give the MOST weight to which approach to value?A) Index methodB) Cost approachC) Income approachD) Sales comparison approach

• Income approach

An appraisal isA) the best "educated guess" based on market research.B) an opinion of value based on supportable evidence and approved methods.C) an idea of the price a buyer would be willing to pay for a property based on current market conditions.D) the actual value based on supportable evidence and approved methods.

• an opinion of value based on supportable evidence and

approved methods.The term reconciliation refers to which of the following?A) Loss of value due to any causeB) The process by which an appraiser determines the highest and best use for a parcel of landC) Separating the value of the land from the total value of the property to compute depreciationD) Analyzing the results obtained by the different approaches to value to form an opinion of value

• Analyzing the results obtained by the different

approaches to value to form an opinion of value Which of the following is NOT used by an appraiser applying the income approach to value?A) Annual net operating incomeB) Accrued depreciationC) Annual gross incomeD) Capitalization rate

• Accrued depreciation

The acronym CMA stands forA) comparable management analysis.B) comparative market analysis.C) competitive management analysis.D) cost marketing analysis.

• comparative market analysis.

If a property's annual net income is $24,000 and it is valued at $300,000, what is its capitalization rate?A) 8%B) 12%C)

15%D) 10.5%

• 8%

The amount of money a property is likely to command in the marketplace is itsA) intrinsic value.B) book value.C) subjective value.D) market price.

• market price.

Appraisers are expected to follow theA) Uniform Standards of Professional Appraisal Practice (USPAP).B) directions of the mortgage lender as to expectations of value.C) directions of the client as to expectations of value.D) directions of the real estate broker as to expectations of value.

• Uniform Standards of Professional Appraisal Practice

(USPAP).

For appraisal purposes, accrued depreciation is NOT caused byA) functional obsolescence.B) accelerated depreciation.C) physical deterioration.D) external obsolescence.

• accelerated depreciation.

Capitalization is the process by which annual net operating income is used toA) determine potential tax value.B) determine cost.C) establish depreciation.D) estimate value.

• estimate value.

There are two vacant adjacent lots, each worth approximately $50,000. If their owner sells them as a single lot, however, the combined parcel will be worth $120,000.What principle does this illustrate?A) SubstitutionB) ProgressionC) RegressionD) Plottage

• Plottage

A federally related transaction is any real estate-related financial transactionA) in which a federal financial institution or regulatory agency is engaged.B) involving only FHA or VA financing.C) involving only a federally chartered bank or savings institution.D) involving only FHA financing.

• in which a federal financial institution or regulatory

agency is engaged.The market value of a parcel of real estate isA) its value without improvements.B) an estimate of its future benefits.C) an estimate of the most probable price it should bring.D) the amount of money paid for the property.

• an estimate of the most probable price it should bring.

The acronym BPO stands forA) buyer's property opinion.B) broker's price opinion.C) broker property opinion.D) buyer's price opinion.

• broker's price opinion.

The characteristics of value include which of the following?A) CompetitionB) BalanceC) AnticipationD) Scarcity

• Scarcity

A homeowner constructs a five-bedroom brick house with an indoor pool in a neighborhood of modest two-bedroom and three-bedroom frame houses on narrow lots. The value of this house is MOST likely to be affected by what principle?A) AssemblageB) ChangeC) RegressionD) Progression

• Regression

An appraisal used in connection with a federally related transaction must be performed by a competent individual whose professional conduct is subject to supervision and

regulation by the state as mandated by theA) Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).B) regulations established by the Department of Housing and Urban Development.C) Fair Housing Act.D) Equal Credit Opportunity Act (ECOA).

• Financial Institutions Reform, Recovery, and

Enforcement Act of 1989 (FIRREA).