Appraisal 2 Flashcards by Jayne Night

An appraiser’s first job is to:
A: Appraise The Property
B: Identify The Problem
C: Determine The Scope Of Work
D: Analyze Data

B: Identify The Problem

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The acronym “URAR” stands for:
A: Uniform Residential Appraisal Report
B: Utah Real Appraisal Report
C: Utah Residential Appraisal Report
D: Uniform Real Appraisal Report

A: Uniform Residential Appraisal Report

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Which of the following are NOT approaches an appraiser uses in determining an opinion of value:
A: Market Data
B: Cost Reproduction
C: Income
D: Gross Rent Multiplier

D: Gross Rent Multiplier

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The appraisal approach that allows for the comparison of comparable properties in order to estimate value is called the:
A: Sales Comparison Approach
B: Cost Approach
C: Income Approach
D: Depreciation Approach

A: Sales Comparison Approach

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URAR

Uniform Residential Appraisal Report

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Sales Comparison Approach

Using comparable sales in the market
area to derive an opinion of value.

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Sales Comparison Approach Process

Gets The Order > Pull County Info > Pull The Listing >
Gather All Data > Call Agent Schedule Appt Go To Home > Inspect Inside/Outside Condition Of The Home > Measurements > Additions > Repairs Updates > Comparable’s In The Area Of The Home

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Sales Comparison Criteria

One Mile Radius
Style Of Home
Characteristics
Square Footage
Sold Properties -90 Days Back Best
Gross Living Area (GLA) Adjustments

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Gross Living Area

GLA everything above grade

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Adjusted Value

The value that the Appraiser assigns derived off the data they collect.

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Opinion of Value

is based off of sold data

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The appraisal approach that takes into account reproduction or replacement cost in order to estimate value is called the:
A: Sales Comparison Approach
B: Cost Approach
C: Income Approach
D: Depreciation Approach

B: Cost Approach

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Cost Approach

takes into account reproduction or replacement cost in order to estimate value

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Income Approach

Based on the present right of future. Used for properties that generate income and investment
properties.

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Cost Approach Process

Primarily with new construction and commercial. Gets the replacement costs by cost breakdown every
single thing that goes into the house/building.

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Cost Approach Criteria

→ Site Value by use extraction or allocation
→ Improvements
→ Estimated land value and depreciation
→ As is site improvements
→ Cost estimators - price per square foot figures

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An appraiser needs to take which of the following into consideration when utilizing the Cost Approach:
A: Estimated Land Value Less Deprecation
B: Comparison Of Comparable Properties
C: Cost Of Construction
D: Both A & C

D: Both A & C

The loss of value for any cause can also be referred to as:
A: Depreciation
B: Deterioration
C: Equity
D: Boot

A: Depreciation

Appraiser Alan has been asked to appraise a home with five bedrooms and one bathroom. Alan will most likely reduce the value of this home based on its:
A: Functional Obselesence
B: External Obselesence
C: Highest And Best Use
D: Physical Deterioration

A: Functional Obselesence

Reproduction vs Replacement

Reproduction
The cost to restore a historical home as it
was using modern materials.

Replacement
The cost of replacement if the property
were completely destroyed.

Depreciation

The value that the Appraiser assigns derived off the data they collect.

Deterioration

Economic age life, major repair needed as in a roof, or like a 40 year old home where nothing has been
done to it.

Functional Obsolescence

It is something that decreases the functionality of the home. As for example, having to go through a
bathroom to get to a dining room.

External Obsolescence

Something in the immediate area, such as, a busy street, train tracks, airports, something that will deter a
buyer buying the home.

The approach to value that is based on the present right to future income is called the: A: Income Approach B: Cost Approach C: Sales Comparison Approach D: Gross Rent Multiplier

A: Income Approach

The rate of return a property will produce on an owner’s investment is called the: A: Annual Net Operating Income B: Cap Rate C: Annual Gross Income D: Gross Rent Multiplier

B: Cap Rate

An appraiser would NOT use which of the following in applying the income approach? A: Index Method B: Accrued Depreciation C: Annual Net Operating Income D: Annual Gross Income

Income Approach Process

Rent estimated value of rent schedule using rental comparables for residential properties that generate and use gross rent multiplier, rent schedule (similar to sales approach).

Capitalization Rate

Also known as, Cap Rate. The income it generates indicates a rate of return a property will produce on an owner's investment.

Gross Rent Or Gross Income Multipliers

Take the estimated rent and divide into the sales prices and gives you the gross rent multiplier. Always requested with income generating properties.

Appraisal

* An appraisal can help you understand and decide what and how to renovate the property There are several components that are considered when conducting an appraisal process. Lets discuss a few of them: * The Neighborhood * The condition of the home * Trends within the area * The foundation of the home * Comparable sales * Exterior material of the home A appraisal is NOT the same thing as an inspection A home inspection is a detailed report of the home's condition Remember, an appraiser will be looking at your neighborhood and comparable sales when conducting an appraisal * There are several factors that can drive the value of the home up or down. The main focus of an appraisal is ALL about a home's current condition

When value is created by the expectation that something is going to happen, this is an example of the principle of: A: Conformity B: Competition C: Change D: Anticipation

D: Anticipation

An appraiser has been asked to provide an opinion of value on a church. The approach that the appraiser will most likely use is the: A: Income Approach B: Cost Approach C: Sales Comparison Approach D: Gross Income Multiplier Method

C: Sales Comparison Approach

An appraiser has been asked to provide an opinion of value on a shopping center. The approach that the appraiser will most likely use is the: A: Income Approach B: Cost Approach C: Sales Comparison Approach D: Gross Income Multiplier Method

A: Income Approach

An appraiser has been asked to provide an opinion of value on a vacant lot. The approach that the appraiser will most likely use is the: A: Income Approach B: Cost Approach C: Sales Comparison Approach D: Gross Income Multiplier Method

C: Sales Comparison Approach

An appraiser has been asked to provide an opinion of value on a new single family residence. The approach that the appraiser will most likely use is the: A: Income Approach B: Cost Approach C: Sales Comparison Approach D: Gross Income Multiplier Method

C: Sales Comparison Approach

An appraiser has been asked to provide an opinion of value on a 60 unit apartment complex. The approach that the appraiser will most likely use is the: A: Income Approach B: Cost Approach C: Sales Comparison Approach D: Gross Income Multiplier Method

A: Income Approach

An appraiser has been asked to provide an opinion of value on a mega plex movie theater. The approach that the appraiser will most likely use is the: A: Income Approach B: Cost Approach C: Sales Comparison Approach D: Gross Income Multiplier Method

A: Income Approach

The principle that says that an improvement must contribute its cost to the value of the property is: A: Competition B: Contribution C: Progression D: Regression

B: Contribution

An appraiser would most likely use which type of appraisal report for a commercial project: A: Letter Form B: Short Form C: Narrative D: Comprehensive

C: Narrative

Appraiser Adam is appraising a vacant lot. The first principle Adam will use to determine an opinion of value is: A: Defining The Problem B: Substitution C: Conformity D: Competition

B: Substitution