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Residential Sales Comparison and Income Approaches > 1 > Flashcards

1 Flashcards

1
Q

“The process of deriving a value indication for the subject property by comparing market information for similar properties with the property being appraised, identifying appropriate units of comparison, and making qualitative comparisons with or quantitative adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market-derived elements of comparison.”

A

The Sales Comparison Approach

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2
Q

The appraisal principle that states that when several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution. This is the primary principle upon which the cost and sales comparison approaches are based.

A

The Principle of Substitution

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3
Q

“The concept that the value of a particular component is measured in terms of its contribution to the value of the whole property, or as the amount that its absence would detract from the value of the whole”.

A

The Principle of Contribution

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4
Q

“The result of the cause and effect relationship among the forces that influence real property value.”

A

The Principle of Change

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5
Q

“The perception that value is created by the expectation of benefits to be derived in the future”.

A

The Principle of Anticipation

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6
Q

Of the three appraisal approaches, the Sales Comparison Approach relies most heavily on the economic principle of:

Contribution
Substitution
Equalization
Anticipation

A

Substitution

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7
Q

“The result of the cause and effect relationship among the forces that influence real property value” is the definition of the principle of

Anticipation
Supply and Demand
Change
Balance

A

Change

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8
Q

“In economic theory, the principle that states that the price of a commodity, good, or service varies directly, but not necessarily proportionately, with demand, and inversely, but not necessarily proportionately, with supply.

A

The Principle of Supply and Demand

In a real estate appraisal context, the principle of supply and demand states that the price of real property varies directly, but not necessarily proportionately, with demand and inversely, but not necessarily proportionately, with supply” .

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9
Q

“Between purchasers or tenants, the interactive efforts of two or more potential purchasers or tenants to make a sale or secure a lease.

A

The Principle of Competition

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10
Q

“The principle that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium”.

A

The Principle of Balance

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11
Q

“The appraisal principle that real property value is created and sustained when the characteristics of a property conform to the demands of its market” .

A

The Principle of Conformity

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12
Q

“In appraisal, the concept that the value of an inferior property is enhanced by its association with better properties of the same type”.

A

Principle of Progression

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13
Q

“In appraisal, the concept that the value of a superior property is adversely affected by its association with an inferior property of the same type”.

A

Principle of Regression

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14
Q

In appraisal, off-site conditions that affect a property’s value.

A

Principle of Externalities

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15
Q
  1. the ability to properly identify the problem to be addressed; and
  2. the knowledge and experience to complete the assignment competently; and
  3. recognition of, and compliance with, laws and regulations that apply to the appraiser or to the assignment.”
A

Competency

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16
Q

“An appraiser must………..correctly complete research and analyses necessary to produce a credible appraisal”.

A

STANDARD 1 of USPAP

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17
Q

“In reporting the results of a real property appraisal, an appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading”.

A

STANDARD 2

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18
Q

Adjustments made in the sales comparison process always start with:

The subject
The comparable
Either subject or comparable
Neither the subject nor comparable

A

The comparable

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19
Q

The first step in the Sales Comparison Approach procedure is

Verify the information
Select relevant units of comparison
Define the scope of work
Research the market

A

Research the market

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20
Q

Which of the following is the sales comparison formula?

Price of comparable ± adjustments = value of subject
Price of comparable – adjustments = price of subject
Price of subject ± adjustments = value of comparable
Price of subject + adjustments = value of comparable

A

Price of comparable ± adjustments = value of subject

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21
Q

Which of the following is NOT a common unit of comparison when appraising 2-4 unit properties?

Price per SF of GLA
Price per room
Price per SF of GBA
Price per bedroom

A

Price per SQ of GLA is not used. We use Price per SF of GBA.

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22
Q

The principle of competition can be between

Purchasers only
Tenants only
Purchasers and tenants
Purchasers and tenants as well as between sellers and landlords

A

Purchasers and tenants as well as between sellers and landlords

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23
Q

“The result of the cause and effect relationship among the forces that influence real property value” is the definition of the principle of

Anticipation
Supply and Demand
Change
Balance

A

Change

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24
Q

The principles of progression and regression are illustrations of what happens when the principle of ______________ is violated.

Conformity
Balance
Change
Substitution

A

Balance

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25
Q

“A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises”

A

neighborhood

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26
Q

“A neighborhood characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural”

A

district

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27
Q

“the area associated with a subject property that contains its direct competition”.

A

market area

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28
Q

“Items of information on value influences that derive from social, economic, governmental, and environmental forces and originate outside the property being appraised”.

A

General Data

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29
Q

“The area associated with a subject property that contains its direct competition” is the definition of

District
Neighborhood
Market area
Suburb

A

Market area

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30
Q

“Details about the property being appraised, comparable sale and rental properties, and relevant local market characteristics”

A

Specific Data

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31
Q

A web site that is a portal to over 200 federal agencies is

usa.gov
HUD.gov
Census.gov
Appraiser.gov

A

usa.gov

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32
Q

The “normal course of business” in an area is determined by:

The actions of an appraiser’s peers only
Expectations of parties who are regularly intended users for similar assignments only
Both actions of appraiser’s peers and expectations of intended users
Fannie Mae and Freddie Mac

A

Both actions of appraiser’s peers and expectations of intended users

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33
Q

Which of the following is NOT an element of comparison in the Sales Comparison Approach?

Real property rights
Use
Conditions of sale
Intended User

A

Intended User

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34
Q

MLS information is compiled for the convenience and use of

Appraisers
Buyers
Sellers
Sales agents

A

Sales agents

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35
Q

Lenders might be sources of information in all of the following areas EXCEPT

Commercial transactions
Lease terms
Interest rates
Industrial transactions

A

Lease terms

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36
Q

When collecting comparable sales information, you would likely collect data concerning all of the following EXCEPT

Recent sales
Copies of home inspection reports
Listings of comparables
Options to purchase

A

Copies of home inspection reports

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37
Q

“A type of market area characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural” is the definition of

District
Census tract
Central business district
Economic area

A

District

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38
Q

When discussing verification, HUD says that __________ by itself, is not considered a verification source.

MLS
Public records
The buyer
The seller

A

MLS

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39
Q

“The process by which a value indication is derived in the sales comparison approach. Comparative analysis may employ quantitative or qualitative techniques, either separately or in combination”.

A

Comparative analysis

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40
Q

analysis is based on numbers, and results in either dollar or percentage amounts.

A

Quantitative

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41
Q

analysis is used for elements that cannot be given a numerical value.

A

Qualitative

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42
Q

Qualitative analysis is used for elements that

Defy description
Are too far apart
Can’t be ranked
Cannot be given a numerical value

A

Cannot be given a numerical value

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43
Q

The process by which a value indication is derived in the Sales Comparison Approach is called

Comparative analysis
Quantitative analysis
Qualitative analysis
Highest and best use analysis

A

Comparative analysis

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44
Q

Comparative analysis may employ quantitative analysis and qualitative analysis

Separately only
Together only
Separately or together
Only in the appraisal of non-residential properties

A

Separately or together

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45
Q

“A quantitative technique used to identify and measure adjustments to the sale prices or rents of comparable properties; to apply this technique, sales or rental data on nearly identical properties is analyzed to isolate and estimate a single characteristic’s effect on value or rent. Often referred to as paired sales analysis.”

A

Paired Data Analysis

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46
Q

“Quantitative techniques used to identify and measure adjustments to the sale prices of comparable properties; a variant of statistical analysis in which an appraiser interprets graphically displayed data visually or through curve fit analysis. Graphs can also be used to support and illustrate market trends, analyze effects, and assist in interpretation of market influences.”

A

Graphic Analysis

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47
Q

“A quantitative technique used to identify and measure trends in the sale prices of comparable properties; useful when sales data on highly comparable properties is lacking, but a broad database on properties with less similar characteristics is available. Market sensitivity is investigated by testing various factors that influence sale prices.”

A

Trend Analysis

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48
Q

“A quantitative adjustment technique in the sales comparison approach; adjustments are based on cost indicators such as depreciated building cost, cost to cure, or permit fees.”

A

Cost Analysis

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49
Q

A quantitative technique used to identify and measure trends in the sale prices of comparable properties; useful when sales data on highly comparable properties is lacking, but a broad database on properties with less similar characteristics is available. Market sensitivity is investigated by testing various factors that influence sale prices” is the definition of ___________ analysis.

Ranking
Cost
Graphic
Trend

A

Trend

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50
Q

“The process of accounting for differences (such as between comparable properties and the subject property) that are not quantified; may be combined with quantitative analysis.”

A

Qualitative Analysis

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51
Q

“A qualitative technique for analyzing comparable sales; used to determine whether the characteristics of a comparable property are inferior, superior, or equal to those of the subject property.”

A

Relative Comparison Analysis

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52
Q

“An ordinal technique for analyzing data, commonly used in the analysis of comparable sales; a variant of relative comparison analysis in which comparable sales are arrayed in descending or ascending order of desirability and each is analyzed to determine its comparability to the subject property.”

A

Ranking Analysis

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53
Q

The process of accounting for differences (such as between comparable properties and the subject property) that are not quantified; may be combined with quantitative analysis” is the definition of ____________ analysis

Economic
Relative Comparison
Graphic
Qualitative

A

Qualitative

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54
Q

The procedure in which we employ just plusses and minuses in sales comparison is called ______________ analysis.

Gross rent multiplier
Graphic
Relative comparison
Paired Data

A

Relative comparison

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55
Q

Which of the following is NOT a form of qualitative analysis?

Ranking analysis
Graphic Analysis
Relative Comparison Analysis
Interviews

A

Graphic Analysis

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56
Q

Comparable A sells for $240,000 and contains 2,300 SF. Comparable B is similar in all aspects, except it contains 2,100 SF, and it sells for $232,000. If our subject property contains 2,200 square feet and Comparable 1 has 2,100 square feet, it would warrant an adjustment of

$3,000
$4,000
$6,000
No adjustment

A

$240,000 - $232,000 = $8,000. 2,300 - 2,100 = 200 SF. $8,000 ÷ 200 SF = $40 per SF. Subject 2,200 SF - 2,100 SF - 100 SF. 100 SF X $40 - $4,000.

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57
Q

“The order in which quantitative adjustments are applied to the sale prices of comparable properties.”

A

Sequence of adjustments

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58
Q

“Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”

A

Fee Simple Estate

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59
Q

“Divided or undivided rights in real estate that represent less than the whole”.

A

Partial Interest

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60
Q

In traditional appraisal theory, the first step in the adjustment sequence is an adjustment for

Market conditions
Real property rights appraised
Sales or financing concessions
Physical characteristics

A

Real property rights appraised

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61
Q

“Rights of use, occupancy, and control, limited to the lifetime of a designated party, sometimes referred to as the life tenant.”

A

Life Estate

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62
Q

“A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e., a lease).”

A

Leased Fee Interest

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63
Q

“The tenant’s possessory interest created by a lease.”

A

Leasehold Interest

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64
Q

“The right to use another’s land for a stated purpose.”

A

easement

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65
Q

“An easement that benefits a legal person or entity (individual, corporation, partnership, LLC, government entity, etc.) and not a particular tract of land; an easement having a servient estate but no dominant estate.”

A

Easements in Gross

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66
Q

“An easement having both dominant and servient estates. The easement interest passes with title to the dominant estate and continues to burden the servient estate. An easement appurtenant contrasts with an easement in gross, which has a servient estate but no dominant estate.”

A

Easement Appurtenant

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67
Q

“The right to drain surface water from one owner’s land over the land of one or more adjacent owners”.

A

Drainage Easement, or Drainage Right of Way

68
Q

“The right to undisturbed use and control of designated air space above a specific land area within stated elevations. Such rights may be acquired to construct a building above the land or building of another or to protect the light and air of an existing or proposed structure on an adjoining lot”.

A

Air Rights

69
Q

When appraising a 4-unit property and at least one unit is leased, the property rights would be

Fee simple absolute
Leasehold estate
Leased fee estate
Life estate

A

Leased fee estate

70
Q

“Trespassing on the domain of another”.

A

encroachment

71
Q

“A form of ownership in which each owner possesses the exclusive right to use and occupy an allotted unit plus an undivided interest in common areas.”

A

condominium

72
Q

“A form of ownership in which each owner of stock in a cooperative apartment building or housing corporation receives a proprietary lease on a specific apartment and is obligated to pay a monthly maintenance charge that represents the proportionate share of operating expenses and debt service on the underlying mortgage, which is paid by the corporation. This proportionate share is based on the proportion of the total stock owned”.

A

Cooperative Ownership

73
Q

“A type of building development designed as a grouping of complementary land uses, such as housing, schools, recreation, retail, office, and industrial parks, contained within a single master development.”

A

Planned Unit Development (PUD)

74
Q

A form of ownership in which each owner possesses the exclusive right to use and occupy an allotted unit plus an undivided interest in common areas” is the definition of a

Condominium
Cooperative
Life estate
REIT

A

Condominium

75
Q

he most desirable form of timesharing is called ___________ timesharing.

Non fee
Fee
Title
Warranty

A

Non fee

76
Q

“An estate in real estate held by one owner”.

A

Tenancy in Severalty

77
Q

“The holding of property by any form of title”.

A

Tenancy

78
Q

Tenancy in Common
Joint Tenancy
Tenancy by the Entirety

A

Concurrent ownership

79
Q

“An estate held by two or more persons, each of whom has an undivided interest”.

A

Tenancy in Common

80
Q

“Joint ownership by two or more persons with the right of survivorship”.

A

Joint Tenancy

81
Q

“An estate held by a husband and wife in which neither has a disposable interest in the property during the lifetime of the other, except through joint action”.

A

Tenancy by the Entirety

82
Q

“A legal vehicle for partial ownership interests in real property in which independently owned properties are conveyed to a trustee; may be used to effect a profitable assemblage or in some cases to facilitate the assigning of property as collateral for a loan”.

A

Land Trust

83
Q

“In law, an organization that acts as a single legal entity in performing certain activities, usually business for profit; also includes charitable, educational, and religious organizations.”

A

Corporation

84
Q

“A private or public partnership that pools funds for the acquisition and development of real estate projects or other business ventures”.

A

syndication

85
Q

Which statement is TRUE about syndications?

They are private partnerships only.
They are public partnerships only.
They can be either a private or public partnership.
They must be corporations

A

They can be either a private or public partnership.

86
Q

Which ownership includes a right of survivorship?

Joint Tenancy only
Tenancy in Common only
Tenancy in Common and Joint Tenancy
Joint Tenancy and Tenancy by the Entirety

A

Joint Tenancy and Tenancy by the Entirety

87
Q

A limited partnership has

Limited partners only
General partners only
Both general and limited partners
Only one general partner

A

Both general and limited partners

88
Q

An organization that acts as a single legal entity in performing certain activities, usually business for profit; also includes charitable, educational, and religious organizations” is the definition of

Corporation
Cooperative
Syndicate
Partnership

A

Corporation

89
Q

A form of ownership in which each owner of stock in a cooperative apartment building or housing corporation receives a proprietary lease on a specific apartment and is obligated to pay a monthly maintenance charge that represents the proportionate share of operating expenses and debt service on the underlying mortgage, which is paid by the corporation” is the definition of

Cooperative
Condominium
PUD
Timeshare

A

Cooperative

90
Q

An estate held by two or more persons, each of whom has an undivided interest” is the definition of

Joint tenancy
Tenancy in severalty
Tenancy by the entirety
Tenancy in common

A

Tenancy in common

91
Q

A business arrangement in which two or more persons jointly own a business and share in its profits and losses” is the definition of

General partnership
Corporation
Limited partnership
Partnership

A

Partnership

92
Q

A tenancy in severalty involves ____________ owner(s).

Only one
More than one
At least two
Corporate

A

Only one

93
Q

“A pledge of a described property interest as collateral or security for the repayment of a loan under certain terms and conditions”

A

mortgage

94
Q

“Mortgages that are neither insured nor guaranteed by an agency of the government, although they may be privately insured.”

A

Conventional mortgages

95
Q

“The process of retiring a debt or recovering a capital investment, typically through scheduled, systematic repayment of the principal.”

A

Amortization

96
Q

“A debt secured by real estate in which mortgage payments are matched to projected increases in the borrower’s income. The periodic payments start out low and gradually increase.”

A

Graduated payment mortgage:

97
Q

“A percentage of the loan amount that a lender charges a borrower for making a loan; may represent a payment for services rendered in issuing a loan or additional interest to the lender payable in advance; also called points”

A

Discount points

98
Q

“A market created by government and private agencies for the purchase and sale of existing mortgages; provides greater liquidity for mortgages. Fannie Mae, Freddie Mac, and Ginnie Mae are the principal operators in the secondary mortgage market.”

A

secondary mortgage market

99
Q

“A lump-sum payment to the lender that reduces the interest payments of the borrower. The cost of the buydown is usually reflected in the price paid and can be expressed as a percentage of principal.”

A

buydown

100
Q

Mortgages that are either insured by the FHA or guaranteed by the VA:

Are treated the same as any other type of financing during an appraisal
Tend to offer favorable terms
Are designed for people requiring a second mortgage
Do not require appraisals

A

Tend to offer favorable terms

101
Q

Cash equivalency adjustments are typically made when

A property was purchased for all cash
A property needed repairs at the time of sale
Steep inflation has impacted property values
A transaction involved non-market financing

A

A transaction involved non-market financing

102
Q

With a land contract, title passes when the seller delivers the deed _________.

At the closing table
At the signing of the contract
When 50% is paid
When the total price is paid

A

When the total price is paid

103
Q

A cash equivalency adjustment is required when the loan is:

FHA
VA
Seller financed
All of the above

A

Seller financed

104
Q

Another name for a land contract is a(n)

Deed of trust
Leasehold contract
Installment sale contract
Wrap-around contract

A

Installment sale contract

105
Q

What happens when the borrower defaults on a VA mortgage and causes a loss to the originating lender?

A perpetual lien is filed against the borrower to recover the loss
The lender writes off the loss against their profits
The VA reimburses the lender for the loss
FHA insurance kicks in and reimburses the lender

A

The VA reimburses the lender for the loss

106
Q

An element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the points in the real estate cycle at which the transactions occur. Sometimes called a time adjustment because the differences in dates of sale are often compared, although that usage can be misleading.”

A

Market Conditions

107
Q

Your research of a comparable sale reveals that the purchase price was $200,000, but the purchaser realized the property needed extensive repairs to the mechanical systems. The estimated cost to cure the problems was $15,000 but the actual costs turned out to be $20,000. What should you do?

Adjust the property sale price by $20,000
Adjust the property sale price by $15,000
Make no adjustment
Adjust the property sale price by $5,000, the amount of the excess cost

A

Adjust the property sale price by $15,000

108
Q

Long-term market cycles are:

Based on the prevailing interest rate
Always rapidly fluctuating and notoriously unstable
Caused by national or international conditions
Of little interest to an appraiser

A

Caused by national or international conditions

109
Q

The life cycle of a market area typically includes the stages of growth, _____________, decline and _______________.

stability, destruction
plateau, stagnation
urbanization, rehabilitation
stability, revitalization

A

stability, revitalization

110
Q

Changes in a market cycle may be cyclical, one-time-only, ___________ and ____________.

Recurring, exponential
Repeating, inverse
Seasonal, exponential
Seasonal, geometric

A

Seasonal, exponential

111
Q

You are in a very hot real estate market with values going up monthly by 2%, and lenders are taking months to process transactions, creating extended closing times. As an appraiser, you should:

Make market conditions adjustments from the date of closing
Make no adjustments for market conditions
Ask your client which date they prefer, and do what is most convenient for them
Adjust the comparables from their contract date of sale to the effective date of the appraisal

A

Adjust the comparables from their contract date of sale to the effective date of the appraisal

112
Q

A property sold in November for $312,500. It sold again 9 months later for $354,800. What was its average monthly rate of appreciation?

  1. 15%
  2. 18%
  3. 50%
  4. 78%
A

1.50%

113
Q

The real estate market tends to be:

Lagging at the end of short-term economic cycles
An early responder to short-term economic cycles
Sluggish to recover from short-term economic cycles
Unrelated to short-term economic cycles

A

An early responder to short-term economic cycles

114
Q

Your research of a comparable sale reveals that the purchase price was $200,000, but the purchaser realized the property needed extensive repairs to the mechanical systems. The estimated cost to cure the problems was $15,000 but the actual costs turned out to be $20,000. What should you do?

Adjust the property sale price by $20,000
Adjust the property sale price by $15,000
Make no adjustment
Adjust the property sale price by $5,000, the amount of the excess cost

A

Adjust the property sale price by $15,000

115
Q

Your subject is located in an area where property values have been declining consistently at .5% a month for the past ten months. You have located a comparable that is practically identical to your subject. It sold 8 months ago for $200,000. How much should you adjust the price?

-$4,000
+$8,000
-$8,000

A

-$8,000

116
Q

Two-bedroom condos in the city sold for a median price of $180,440 nine months ago and that the median price of those homes for the current month is $206,390. What is the indicated average increase per month?

8%

  1. 1%
  2. 4%
  3. 6%
A

1.6%

117
Q

A home sold five months ago for $232,000. Since then, property values have appreciated by 1% per month. (Use simple interest.) The appraiser estimates that its inferior location depreciates the total value by 10%. What is its estimated value?

$214,560
$216,400
$218,680
$219,240

A

$219,240

118
Q

You are in a very hot real estate market with values going up monthly by 2%, and lenders are taking months to process transactions, creating extended closing times. As an appraiser, you should

Make market conditions adjustments from the date of closing
Make no market conditions adjustments
Ask your client which date they prefer, and do what is most convenient for them
Adjust the comparables from their contract date of sale to the effective date of the appraisal

A

Adjust the comparables from their contract date of sale to the effective date of the appraisal

119
Q

The life cycle of a market area typically includes the stages of growth, _____________, decline and _______________.

Stagnation, destruction
Recession, revitalization
Urbanization, rehabilitation
Stability, revitalization

A

Stability, revitalization

120
Q

Which of the following would NOT be classified as a long term trend for market cycles?

Population trends
Interest rates
Income levels
Migration patterns

A

Interest rates

121
Q

Which of the following is LEAST LIKELY to be a factor that can help you analyze changes in local market conditions?

Foreclosure rates in the area
Amount of new construction available for sale
Foreclosure rates nationally
Instances of seller financing

A

Foreclosure rates nationally

122
Q

Which of the following would NOT be classified as a short term trend for market cycles?

Availability of financing
Interest rates
Income levels
Loan to value ratios

A

Income levels

123
Q

he concept of real estate value being linked to location comes to us from the economist

William Kinnard
Alfred Marshall
Adam Smith
Irving Fisher

A

Alfred Marshall

124
Q

A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises” is the definition of

Neighborhood
Market area
District
Marketing area

A

Neighborhood

125
Q

A district is an area characterized by ____________ land use.

Contradictory
Varied
Incongruous
Homogeneous

A

Homogeneous

126
Q

The definition of neighborhood has changed from a grouping of __________ to a grouping of ____________ people, buildings and uses.

Diverse, similar
Homogenous, congruous
Complementary, supplementary
Congruous, identical

A

Homogenous, congruous

127
Q

The area associated with a subject property that contains its direct competition” is the definition of

Neighborhood
District
Market area
All of these

A

Market area

128
Q

What is one of the best ways to determine neighborhood boundaries?

Driving around the area
Checking Congressional voting districts
Drawing lines by zip code
Asking the chamber of commerce

A

Driving around the area

129
Q

Which is the most inclusive term?

Neighborhood
District
Market area
They all mean exactly the same thing

A

Market area

130
Q

The area in which alternative, similar properties effectively compete with the subject property in the minds of probable, potential purchasers and users” is the definition of

Neighborhood
District
Market area
All of the above

A

Market area

131
Q

The period of time over which a structure may reasonably be expected to perform the function for which it was designed” is the definition of ______________ life.

Physical
Useful
Economic
Effective

A

Useful

132
Q

Which of the following property types should NOT be reported on the URAR?

Single unit
Single unit with accessory apartment
Unit in a PUD
Unit in a condominium

A

Unit in a condominium

133
Q

Which of these is one of the written real property appraisal report options identified in USPAP?

Restricted Use Report
Appraisal Report
Limited Report
Letter Opinion of Value

A

Appraisal Report

134
Q

Fannie Mae’s Market Conditions Addendum is also known as Form

1004MC
1004D
1025
2090

A

1004MC

135
Q

Fannie Mae expects an explanation when the net adjustments exceed ____% and the gross adjustments exceed _____%.

10, 15
15, 25
5, 30
There is no set number

A

There is no set number

136
Q

Fannie Mae requires a sales history of the subject property for ____ years and the comparable properties for ____ years.

1, 1
2, 1
3, 1
3, 3

A

3, 1

137
Q

The most common methodology used to value residential investment properties is the

Potential gross income multiplier
Overall capitalization rate
Effective gross income multiplier
Gross rent multiplier

A

Gross rent multiplier

138
Q

“A tangible or intangible benefit of real property that enhances its attractiveness or increases the satisfaction of the user. `

A

Amenity

139
Q

“The interests, benefits, and rights inherent in the ownership of real estate.”

A

Real Property

140
Q

“An identified parcel or tract of land, including improvements, if any.

A

Real Estate

141
Q

“The tenant’s possessory interest created by a lease.”

A

Leasehold Interest

142
Q

“A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual landlord-tenant relationship (i.e., a lease).”

A

Leased Fee Interest

143
Q

The HP 12C has ______ storage registers.

5
10
15
20

A

20

144
Q

You take a 240 day note on September 14, 2012. When will it be due?

April 15, 2013
May 12, 2013
May 14, 2013
May 16, 2013

A

May 12, 2013

145
Q

“Conversion of benefits received in the future (e.g., periodic incomes, cash flows, reversion) to present value.”

A

discounting

146
Q

In the Six Functions of a Dollar table, column ___ is also called the annuity column.

1
2
4
5

A

2

147
Q

In the Six Functions of a Dollar table, column ___ is also called the Discount Factor column.

1
2
3
4

A

4

148
Q

In the Six Functions of a Dollar table, which columns solve for present values?

1, 2, 5
2, 4, 6
1, 2, 3
4, 5, 6

A

4, 5, 6

149
Q

Compounding and discounting are ___________.

Opposites
Equal
Complementary
Not related

A

Opposites

150
Q

“The procedure in which a discount rate is applied to a set of projected income streams and a reversion. The analyst specifies the quantity, variability, timing, and duration of the income streams and the quantity and timing of the reversion, and discounts each to its present value at a specified yield rate.”

A

Discounted Cash Flow Analysis

151
Q

“The total income attributable to real property at full occupancy before vacancy and operating expenses are deducted.”

A

Potential Gross Income (PGI)

152
Q

“The anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses and an addition is made for any other income.”

A

Effective Gross Income (EGI)

153
Q

Fannie Mae form 1007 is titled

Uniform Residential Appraisal Report
Market Conditions Addendum
Update and/or Completion Report
Single Family Comparable Rent Schedule

A

Single Family Comparable Rent Schedule

154
Q

When using the Fannie Mae 1007 form, an appraiser is expected to ________ any utilities that may be included in the comparable property rental amounts.

subtract
add in
ignore
verify with the utility company

A

subtract

155
Q

Lenders use _____________ income when underwriting loans for 2 to 4 unit residential properties.

Operating
Potential Gross
Effective Gross
Taxable

A

Operating

156
Q

When using Form 216 where at least one of the units is owner occupied

Estimate and use market rent for the owner-occupied space
Do not use any rent for the owner-occupied space
Make an adjustment for the owner-occupied space
Fannie Mae allows appraisers to use their own judgment

A

Do not use any rent for the owner-occupied space

157
Q

What is the form number for the Fannie Mae SRIPAR form?

1120
1025
1125
1020

A

1025

158
Q

Which of these unit indicators was a new addition to the March 2005 version of the SRIPAR?

Sale price per square foot of GBA
Sale price per unit
Sale price per room
Sale price per bedroom

A

Sale price per bedroom

159
Q

Which of the following indicators was on the old SRIPAR form?

Sale price per square foot of GBA
Sale price per unit
Sale price per room
All of the above were on the old form

A

All of the above were on the old form

160
Q

Standards Rule 1-1(c) of USPAP says an appraiser must “not render appraisal services in __________________ manner…”

An illegal
A careless or negligent
An inappropriate
Unsupported

A

A careless or negligent

161
Q

Reconciliation takes place

At the end of the report only
Throughout the report
In the Sales comparison approach only
In the Income capitalization approach only

A

Throughout the report

162
Q

STANDARD 1 of USPAP states: “In developing a real property appraisal, an appraiser must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analysis necessary to produce _________________.”

A Certified appraisal
An appropriate result
Credible results
A credible appraisal

A

A credible appraisal

163
Q

“The criteria that enable an appraiser to form a meaningful, defensible conclusion about the final value opinion. Value indications are tested for the appropriateness of the approaches and adjustments applied, the accuracy of the data, and the quantity of evidence analyzed” is the definition of

Statistical analysis
Micro analysis
Reconciliation criteria
Reconciled data

A

Reconciliation criteria

164
Q

Which is the more recent term?

Neighborhood
District
Market
Market area

A

Market area

165
Q

“A type of market area characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural” is the definition of

District
Census tract
Market area
Community

A

District

166
Q

District

A

“A type of market area characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural” is the definition of

167
Q

Prior to accepting an assignment an appraiser must have the _____________ to complete the assignment competently.

Knowledge only
Experience only
Motivation or experience
Knowledge and experience

A

Knowledge and experience

Residential Sales Comparison and Income Approaches (1 decks)

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