Appraisal 1 Flashcards
Property valuation or land valuation is the process of developing an opinion of value is a(n)________
A: Appraisal
B: Demand
C: Supply
D: None Of The Above
A: Appraisal
_______ is the amount for which something can be sold on a given market
A: Property Value
B: Principle Value
C: Market Value
D: None Of The Above
C: Market Value
Definition of Appraisal
- Impartial analysis and evaluation conducted according to established criteria to determine the acceptability, merit, or worth of an item.
- Evaluation by a qualified appraiser to (1) assess the current market value of a property, (2) estimate the extent of damage to an insured property
and cost of repairs, or (3) determine if a total loss occurred. A written appraisal is usually a key requirement when a property is bought, sold, insured, or mortgaged. It is required also when a claim is filed for compensation for damage or destruction of the insured property. - Alternative term for valuation.
What is required to obtain an Appraiser’s license? These are the requirements:
- In order to become a certified residential appraiser, you will need the following: A bachelor’s degree. At least 200 hours of AQB-approved appraisal coursework.
What is USPAP?
- In 1989, the Uniform Standards of Professional Appraisal Practice (USPAP) was authorized by Congress as the minimum performance standards for appraisal practice in the United States of America. Published by The Appraisal Foundation, USPAP is recognized as the source for standards for professional appraisal practice in the United States and many other parts of the world. The main purposes of USPAP are to protect the public and to promote public trust in the appraisal profession.
- USPAP contains both rules and standards pertaining to: (1) development of an appraisal; and (2) the reporting of that value opinion to the client. USPAP provides details on what an appraiser must consider in order to be independent, impartial and objective and to arrive at a credible opinion of value. It does not dictate specific methodologies or approaches that are to be employed in order to arrive at a conclusion. For a complete understanding, the official USPAP document can be viewed at www.appraisalfoundation.org.
Value
- Property valuation
- land valuation is the process of developing an understanding of value
What is Market Value
The amount for which something can be sold on a given market
Supply
“The total amount of a good or service available for purchase; along with demand, one of the two key determinants of price”.
Demand
Definition The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. Along with supply, demand is one of the two key determinants of the market price.
The acronym AMC stands for:
A: Appraisal Management Company
B: Assets Merging Company
C: Arrangement Management Company
D: None Of The Above
A: Appraisal Management Company
The Nature of Value = DUST
- Demand
- Utility or usefulness
- Scarcity
- Transferability
The Essential Parts of an Appraisal
- Date
*Property Description - Estimate of value
*Signature
Substitution
Definition An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no costly delay is encountered in making the substitution.
The Appraisal Process
1) Define the problem
2) Conduct survey
3) Gather data
4) Classify data
5 Reconcile data
6) Issue Report
Conformity
The appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value. In general, conformity assumes that a neighborhood that is reasonably similar in social and economic activity will result in properties that
reach their maximum value.
