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Real Estate Exam > Appraisal > Flashcards

Appraisal Flashcards

1
Q

Market value is

A

Not cost, most probable price, market price

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2
Q

Essential elements of value

A

Demand, utility, scarcity, transferability (DUST)

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3
Q

Improved value of land

A

Land and improvements (fenced)

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4
Q

Appraiser’s main concern

A

Marketability and acceptability

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5
Q

Business cycle

A

Prosperity, expansion, recession, depression (PERD)

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6
Q

Neighborhood cycle

A

Development, stability, decline, revitalization (DSDR)

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7
Q

Ethical for appraiser to

A

Disclose interest

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8
Q

Appraiser most interested in

A

Date price was agreed upon

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9
Q

How long is Appraisal good for

A

Given date

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10
Q

Unaccepted methods of appraisal is charged with

A

Felony

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11
Q

Appraising single family residence is not which kind of value

A

Not assessed value

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12
Q

License for strip mall

A

Certified general

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13
Q

Narrative appraisal report

A

Not financing available, type of value, statement of purpose

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14
Q

Fee appraiser

A

Self employed, charges a fee

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15
Q

Appraisal objective

A

Support sales price, make loan, start on improved development

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16
Q

What does an appraiser do After value indications

A

Reconcile all reports

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17
Q

Why real estate has value

A

Maximum use of resources

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18
Q

Increase in value may mean

A

Unearned increment population, over time appreciation

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19
Q

Plottage is

A

Two or more units under common ownership

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20
Q

Conformity is

A

Maintenance of value

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21
Q

Examples of Principal of contribution (adds value)

A

Swimming pool, effect on net income

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22
Q

Principal of regression

A

Nearby substandard property (something nearby that brings down the value)

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23
Q

Sales price of comparable homes

A

Market data approach

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24
Q

Similar and recent comps

A

Market data approach

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25
Q

Principal of substitution is used in what approach

A

Market data approach

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26
Q

Adjustments needed - no two properties identical

A

Market data approach

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27
Q

Subtract features from comparables

A

Market data approach

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28
Q

Hardest part in market data approach

A

Hardest part adjusting for differences

29
Q

Licensees use this approach for comps

A

Market data approach

30
Q

Limited in inactive market and rapidly changing economic conditions makes difficult of this approach

A

Market data approach

31
Q

Cost approach is used in what type of properties

A

Special purpose properties

32
Q

Cost approach is calculated by

A

Cost new, minus depreciation, plus land

33
Q

Upper limits of value is what type of approach

A

Cost approach (replacement)

34
Q

Replacement cost - same utility

A

Cost approach (replacement)

35
Q

Reproduction cost - exact replica

A

Cost approach (reproduction)

36
Q

1910 house - reproduction (over 100 years old, anything historic)

A

Cost approach (reproduction)

37
Q

Cost approach concepts

A

Quantity survey, square foot, unit in place

38
Q

Cost approach is better for

A

New home - not old

39
Q

Cost approach’s least important concept

A

Not original cost to build

40
Q

Cost of smaller house - more per square foot

A

Cost approach concepts

41
Q

Explain Income approach (capitalization)

A

Converts income into value

42
Q

Best definition of income approach

A

Present worth of future benefits

43
Q

To arrive at effective gross income

A

Deduct for vacancy

44
Q

To arrive at annual net income

A

Deduct for management expenses

45
Q

Most difficult step of income approach

A

Select cap rate

46
Q

Depreciation means

A

Loss in value from any cause

47
Q

Depreciation causes:

A

Physical (wear and tear), Functional Expenses

48
Q

Obsolescence means

A

Impairment of desirability (ex. no parking), Not wear and tear

49
Q

Functional obsolescence means

A

Within property lines

50
Q

Example of functional obsolescence

A

Two houses, same costs, different values

51
Q

Economic obsolescence

A

Outside property lines, Not outdated kitchen, most difficult to cure

52
Q

Economic life for a building means

A

Building earns sufficient income

53
Q

Effective age on a house

A

15 year old house appears to be only 6 years

54
Q

How do you calculate Gross Rent Multiplier (GRM)

A

Sales price divided gross monthly rent, $308,736

55
Q

Bureau of Real estate appraisers issues and does what

A

Issues licenses, investigates complaints

56
Q

Analysis of fact is

A

Appraisal value

57
Q

What presents worth

A

Appraisal value

58
Q

Ability of one commodity is

A

Appraisal value

59
Q

Desirous person is

A

Appraisal value

60
Q

What value is Not a fact

A

Appraisal value

61
Q

First step for vacant land

A

Highest and best use for appraisal

62
Q

Deduct demolition

A

Highest and best use for appraisal

63
Q

Greatest net return

A

Highest and best use for appraisal

64
Q

Site analysis

A

Highest and best use for appraisal

65
Q

Interim use

A

Highest and best use for appraisal

66
Q

No prudent person

A

Principal of substitution

67
Q

Use, design, income

A

Principal of substitution

68
Q

Lowest price preferred

A

Principal of substitution

Real Estate Exam (8 decks)

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