12 Ch1 Introduction to Advanced Applications quiz Flashcards
A property can be complex because of
The property characteristics
A non-complex property with four residential units and having a transaction value of $750,000 could be appraised by
A Certified General, a Certified Residential, or a Licensed Residential Appraiser
An appraisal on a complex single-family property having a transaction value of $2 million would require the services of
A Certified Residential or Certified General Appraiser
A home with a relatively unusual type of construction, such as a berm home (built into a hill) is
Sometimes a complex property
Which of these properties would likely be considered complex?
A house constructed to resemble a shoe, A 5,000 square foot home in a neighborhood of 2,000 square foot homes, A typical single-family home with a leaking oil storage tank on the property, A home with unfinished construction, A home located in a transitional neighborhood, A home located on a mountaintop with a view of three states, Form of ownership, Market conditions, Property characteristics, The appraiser’s level of licensure, The proposed loan amount,
How does location factor into the decision on whether or not a property is complex?
It sometimes makes a property complex
An ordinary-looking home can have a hidden issue that can make the property complex.
TRUE
Complex properties are always identified by the appraiser and/or the client before the assignment is accepted.
FALSE
Where should an appraiser look to find a definition of a “complex property”?
Code of Federal Regulations. “one in which the property to be appraised, the form of ownership, or market conditions are atypical”.
Market conditions which might make a property complex include
Values increasing at an exceptional rate, Values decreasing at an exceptional rate, No sales due to a depressed local economy
An appraiser’s role has been likened to that of a real estate “market doctor”. What does this analogy mean?
The appraiser diagnoses the health of the market
John leases a house to Sarah. Sarah’s interest is best described as a
Leasehold interest
Ramon owns a home. He grants his Aunt Marie, the right to live in and occupy the home as long Ramon’s father is still alive. This right is best described as a
Life estate pur autre vie
John leases a house to Sarah. John now holds a
Leased fee interest
Typically, the ownership interest appraised in a market value appraisal of a residential property is
Fee simple estate
A large detached garage costs $80,000 to construct, but it only adds $25,000 to the value of the property. This is an example of the principle of
Contribution
What does the course author mean by the statement “you must be a glass half full appraiser when dealing with complex properties”?
You must concentrate on the data you have, rather than the data you do not have
What is an appraiser’s best source for information about conventional residential mortgage underwriting guidelines?
Fannie Mae
As it refers to the sales comparison approach, what is meant by “bracketing”?
At least one comparable should be superior to the subject in physical characteristics, and one comparable should be inferior
Making an estimate that is beyond the range of known data is
Extrapolation. Extrapolation involves making an estimate beyond the range of known data. This concept is useful when the subject has characteristics outside the range of typical properties in the area. A home with a living area much larger than any comparable sales is an example where extrapolation would be used. Ch 1, Nontraditional Techniques
How many comparable sales should be used in the sales comparison approach for a complex property?
It depends
What does the course author mean by the statement “you must be a thinking appraiser”?
It is more important to think than it is to move fast
An appraiser is valuing a truly unique property for a mortgage lender. The appraiser is careful to follow the lender’s guidelines and using only recent sales that are located nearby, even though the properties are not necessarily similar. What is the most likely result of the appraiser’s actions?
A bad appraisal
The best way for an appraiser to solve a complex appraisal assignment is by going into “autopilot” mode.
FALSE
What happens if you are appraising a property and you find there aren’t any suitable comparable sales?
You may be able to develop the cost and/or income approaches
All of the following are techniques related to the Sales Comparison Approach
Extrapolation, Qualitative analysis, Relative ranking
Eric owns a home. He grants his mother, Martha, the right to live in and occupy the home as long as she is alive. This right is best described as a
Life estate or life interest. Life estate is defined as “total rights of use, occupancy, and control, limited to the lifetime of a designated party”. This is a life estate situation. It is not a life estate pur autre vie because the life estate is based on Martha’s life, not the life of another person. Ch 1, Ownership Interests Can Make a Property Complex
Which group established levels of appraiser licensure and certification?
The Appraisal Qualifications Board
Sally, the owner, leases a house to Peter, on a long-term lease. What type of interest does Peter now hold in the property?
Leasehold interest
Which type of classification applies to the appraisal of one to four residential units without regard to transaction value or complexity?
The Certified Residential Real Property Appraiser Classification
What can be used to support adjustments made (using a percentage adjustment)?
Rent difference
Which type of classification applies to the appraisal of all types of real property?
The Certified General Real Property Appraiser Classification
