3.8 Flashcards
The 4 stages of a property’s life cycle are Growth, Stability, Decline, and ______.
Revitalization
The four elements of value in appraisal law are ______, ______, _____, and ______. (Remember the acronym STUD).
Security, transferability, utility and demand
The remaining period for which real estate improvements are expected to generate more income than operating expenses cost is known as _______.
Economic life
The rules of real estate appraisal are codified by the ________.
Uniform Standards of Professional Appraisal Practice (USPAP)
To represent yourself as a real estate appraiser in Minnesota, you need a _______.
License
True or False:
In the United States, the rules of real estate appraisal are codified in the Uniform Standards of Professional Appraisal Practice (USPAP)
True
The Uniform Standards of Professional Appraisal Practice (USPAP) was developed to protect lenders against unethical and _______ appraisers.
Incompetent
True or False:
An officer or employee of a corporation, partnership, or other business entity may act as a real estate appraiser without obtaining a license in Minnesota.
True
A real estate appraisal is a service performed by an appraiser that develops an opinion of value, based upon the highest and _____ of real property.
Best use
True or False:
The four-stage life cycle of real property includes: Growth, Stability, Decline and Revitalization.
True
In appraisal, “sales comparison” is an approach to determine ______.
Value
True or False:
The federal govenment regulates appraisal licensing.
False (States do)
The largest and most influential professional organization of real estate appraisers in America is _________.
The Appraisal Institute
To become an appraiser in Minnesota, you need _______ hours of pre-license training.
90
True or False:
An appraiser develops an opinion of value, based upon the highest and best use of real property.
True
An appraiser develops a/an _________ based upon the highest and best use of real property.
Opinion of value
In Minnesota licensed real estate salespersons or brokers do not need an appraisal license when giving a ________ of the price of real estate.
Market analysis
In Minnesota, city _______ do not need an appraisal license when giving an opinion of value.
Assessors
_______ is defined as the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale.
Market value
_______ determines the net present value (NPV), which is a formula used by an appraiser conducting this type of appraisal.
Value-in-use
The value-in-use type of appraisal determines the _______ of a future cash flow that an asset is expected to generate for a specfic owner under a specific use.
Net present value (NPV)
______ is the value to one particular investor, which may be above or below the fair market value of a property.
Investment value
________ determines the value of real property covered by an insurance policy.
Insurable value Appraisal
_______ is a term that means the appraiser has to consider the appraisal approach most appropriate for the subject property, the quality of available data, and the amount of adjustments between comparable properties.
Reconciliation
The ______ is what was paid for a property.
Price
_____ is what the price for a property could be with fair market conditions.
Market Value
The four elements of _______ are Scarcity, Transferability, Utility, and Demand (STUD).
Value
Regarding “elements of value,” the acronym STUD stands for _____, _______, ________, and _______.
Scarcity, transferability, utility, and demand
Regarding value _____ is the present or anticipated supply of a product in relation to the demand for it.
Scarcity
The element of _______ means the property must be transferable in order to be marketable.
Transferability
The element of _____ means the capacity of a commodity to satisfy a need or desire.
Utility
The element of ______ is created by utility.
Demand
The principle of ______ holds that maximum value is realized when land uses are compatible, and a reasonable degree of architectural harmony is present.
Conformity
The principle of _______ states that value will tend to be set by the cost of acquiring an equally desirable substitute.
Substitution
The principle of ______ states that the worth of a greater-valued object is reduced by association with many lesser-valued objects of the same type.
Regression
The ______ approach to the appraisal looks at the price of similar properties being sold in the same marketplace.
Sales comparison
In the sales comparison approach to appraisal, a comparable property (a “comp”) is adjusted _____ if the comp has more valuable features than the property being appraised.
Downward
A comp is adjusted ______ when it has less valuable features than the property being appraised.
Upward
The _______ approach is used with the insurable value appraisal.
Cost
______ cost means the cost of reproducing an exact replica of the property.
Reproduction
_______ cost is the cost of building a house or other improvement which has the same utiltiy, but using modern design, workmanship, and materials.
Replacement
________ is the loss of value from all causes within the property except those due to physical deterioration.
Functional Obsolescence
The _______ appraisal approach is used to value commercial and investment properties.
Income
A _______ rate (cap rate) is used to derive a capital value for the expected investment property’s net income.
Capitalization
