Appraisal

Question 1

Social: influence value as popuiations
change
- Economic: infiuence value through supply and
demand for goods, services, and real estate
-Political: influence value through legal clirmate
and political actions
•Physical forces: influence value based on the
migration pattern of its population

Answer 1

Social, economic,
political, and
physical forces

Question 2

Value is created, strengthened, at sustained
when similarity exists
For example, a 3,600 sqft home ina
neighborhood full of 1,200 sqft. ft. homes would
generally be less valuable.

Answer 2

Conformity

Question 3

The priniple that recognizes that the
value of aproperty is largerly based it’s location and the state af the surrounding
area

Answer 3

Change

Question 4

The idea that peaple will not pay more for one property if the value of an equally useful property is available at a
lower cost

Answer 4

Substitution

Question 5

The calculation of the cost of adding other
components to a property and che value these
additions contribute to the real property,For example, adding marble countertops will not
increase the value of the real property as much as
the cost to add the counters would be.

Answer 5

Coneribution

Question 6

The most profitable, financially affordable, and
legal use of a property

Answer 6

Highest
and best use

Question 7

The value of a product goes up or down
depending on the populations desire for the
product and the business’s ability to provide it

Answer 7

Supply
and demand

Question 8

The ability of the seller to transfer the title to a,buyer

Answer 8

Transferability

Question 9

The available inventory of similar products or
properties

Answer 9

Supply

Question 10

The benefits of a product to a consumer

Answer 10

Utility

Question 11

The potential consumer base for a product
or property,When marketing a product, the current market
must be examined and potential customers
identified so that the product will meet the
future needs of the buyers and the ability of the
Buyers to purchase it.

Answer 11

Demand

Question 12

What a willing and able buyer will pay for a property, assuming the seller will accept it

Once a completed transaction has occurred establishing the market value of future real estate transaction in the same area

Answer 12

Market price

Question 13

The most probable price that a property would
Sell for in a competitive and open market

Answer 13

Market value

Question 14

Smaler or under-improved properties increase in
value by having arger, mare-improved properies
nearby

Answer 14

Proggression

Question 15

Larger or over properties decrease in value when smaller or less- imoroved properties are in the area

Answer 15

Regression

Question 16

The prediction in today’s dollars of what the future value of the property will be

Answer 16

Anticipation of
value

Question 17

The potential for profit that attracts new
buyers and sellers to a market,If there is an excess of buyers, the value of buyers
will decrease and give more value to the seilers
seller’s market). If there are too many sellers, the
value of the sellers decreases and will give more
value to the buyers (buyer’s market).

Answer 17

Competition

Question 18

Combining one or more adjacent lots into one
Larger iot which resuits in increased value

Answer 18

Plottage

Question 19

Aless expensive and less formal version of an
appraisal that financial institutions can request to
determine relative value of a property, typically
one in foreciosure

Answer 19

Broker Price
Opinion (BPO)

Question 20

Compares recently listed and sold properties that are similar to the subject property, but the price is adjusted to account for differences between the comparable (combs) and the subject

Answer 20

Sales
comparison
approach

Question 21

An informal method of determining
estimated value,Real estate agents generate this number by
comparing recently listed and sold properties
in the area to the subject property. This is for
informational purposes and would not be used to
finance a property.

Answer 21

Comparative
Market Analysis
(CMA)

Question 22

Most comps will be similar to, but not exactly
like, the subject property.,Adjustments must be made to account for
differences between the comp and the subject.
The best comps will have the fewest adjustments
needed

Answer 22

Comparison
with subject

Question 23

The closing date of comparable properties,The most comps have sold within the last six months

Answer 23

Time of sale

Question 24

The physical location of a comparable property
should be similar to the subject property: same
zip code, same neighborhood or section of
neighborhood, same high school zone, same
zoning classification, etc.

Answer 24

Location

Question 25

Adjustments are made to account for any differences between the comps and the subject Examples would include age, lot size,
construction materials, number of bedrooms and
bathrooms, etc.

Answer 25

Physical
characteristics,

Question 26

Alowances are made for concessians made to
the buyer by the seller, such as paid clasing costs
which effectively teduce the amount the house
actally sold for

Answer 26

Sales concessions

Question 27

Income approach a comparison approach thar
is appled only to income-producing properties
-Capitalization approach: used to value,commercial and imvestment properties; uses
the income stream to determine present value

Answer 27

Income
approach vs.
capitalization
approach

Question 28

The formula is:,NOl=GPl-Vacancy-Operating expenses,NOL= Net Operating Income
GPI=Gross Potential income

Answer 28

Net Operating
Income (NOI)
formula

Question 29

Determines the loss in property value from one or types of deterioration

Answer 29

Estimate the depreciation

Question 30

,Which process are appraisers
using to determine che estimaced
value of a property?,

A Stabiization

,B Sunvey

,C Application

,D Reconciliation

Answer 30

D: Reconciliation

Question 31

In which circumstance can CMA be used?

A. As proof for a homeowner to get a home equity loan?

B. As information for a buyer to use when selecting a home

C. As legal proof property value

D As a guarantee of sales price

Answer 31

B. As information for a buyer to use when selecting a home

Question 32

Which scenario describes
external obsolescence?

A. tree in the front yard that has been hit by lightning

B. Outdated fixtures in the kitchen and bathrooms

C. Poorly maintained properties in the neighborhood

Answer 32

C. Poorly maintained nearby properties in the neighborhood

Question 33

Which concept is NOT an element of
value?

A. Obsolescence,

B. Transferability

C Utility

D Scarcity

Answer 33

Obsolescenceis

Question 34

If a buyer wants to estimate the
future profits from the purchase of
an apartment building, which approach to value would an agent use to help the buyer?

A Profit approach,

B income approach

C Cost approach

D. investment approach

Answer 34

B The income approach is applied to
income-producing properties An apartment

Question 35

Which scenario describes external obsolescence?

A.tree in the front yard that has been hit by lightning

B.Outdated fixtures in the kitchen and bathroom

C.Poorly maintained properties in the neighborhood

D. The convenient access to schools

Answer 35

C.Poorly maintained properties in the neighborhood

Question 36

Ourdated design or utility,example a house with several bedrooms
only one bathroom, or only a wood-burning Stove for heating

Answer 36

Depreciation Functional
obsolescence

Question 37

Determines the loss in property value from one more types of deterioration

Some deterioration is curable, meaning it can be easily corrected with cosmetic fixes or basic updates. Other deterioration is incurable and involves large, expensive structural issues

Answer 37

Estimate the accrued
depreciation

Question 38

Anything
from
normal
wear
and
tear
to maior
structural damage

Answer 38

deterioration

Question 39

Determines the value of the land. excluding any
Souctures

Answer 39

Estimate
the
value
of the land

Question 40

NOH Cap Rate = Value

Answer 40

Capitalization
rate formula