APPRAISAL CHP4

Question 1

Which is NOT an approach to value?
a. comparative market analysis
b. cost approach
c. income approach
d. sales comparison approach

Answer 1

a. comparative market analysis

Question 2

As an appraiser defines the appraisal problem, he would NOT identify the
a. effective date of the appraisal
b. purpose of the appraisal (type of value)
c. relevant characteristics of the property being appraised
d. racial makeup of a neighborhood

Answer 2

d. racial makeup of a neighborhood

Question 3

A partial interest in real estate is
a. also known as fee simple interest
b. an interest that is the entire bundle of rights, plus some additional rights
c. any interest in real estate that is less than the entire bundle of rights
d. an interest that is held by more than one co-owner

Answer 3

c. any interest in real estate that is less than the entire bundle of rights

Question 4

The principle of change says
a. all factors that influence real estate are constantly changing and, thus, the property value itself is subject to constant change
b. the property value itself should only increase
c. some factors that influence real estate are subject to change and, thus, the property value itself may change from time to time
d. the appraiser and the method used will affect the market value of real estate

Answer 4

a. all factors that influence real estate are constantly changing and, thus, the property value itself is subject to constant change

Question 5

Why is the effective date important in an appraisal?
a. The appraisal is valid for one year from the date of the appraisal.
b. The appraisal is valid for six months from the date of the appraisal.
c. The appraisal is valid only as of the effective date on the appraisal.
d. The date is not important because of the principle of change.

Answer 5

c. The appraisal is valid only as of the effective date on the appraisal.

Question 6

Appraiser J is completing an appraisal assignment for a 15-year-old house. Which type of data would be LEAST relevant to the appraisal?
a. general data covering the great forces in the marketplace
b. specific data for comparative purposes (such as other sales or cost information)
c. specific data on the subject property (such as legal description)
d. specific data on the transfer history of the property going back to the original deed

Answer 6

d. specific data on the transfer history of the property going back to the original deed

Question 7

When looking at highest and best use, what is the primary question the appraiser must answer?
a. Can the client afford to have existing improvements razed?
b. What is the best way to ensure value without tearing down the existing structure(s), if at all possible?
c. What is the ideal improvement for each possible zoning type?
d. What is the ideal improvement for the land if it were vacant?

Answer 7

d. What is the ideal improvement for the land if it were vacant?

Question 8

Which is NOT an important assumption of highest and best use?
a. Highest and best use gives maximum economic advantage to the owner.
b. Highest and best use implies the right mix of capital improvements and land.
c. Land devoted to highest and best use will always result in a loss of income.
d. There is only one highest and best use for land at a given point in time.

Answer 8

c. Land devoted to highest and best use will always result in a loss of income.

Question 9

When reconciling indications of value, an appraiser ____ mathematically averages them.
a. always
b. never
c. rarely
d. sometimes

Answer 9

b. never

Question 10

According to USPAP, appraisal reports must
a. be prepared on an industry form.
b. be provided to the client in written form only.
c. be provided to the property owner, even if he is not the client.
d. clearly and accurately set forth the appraisal in a manner that will not be misleading.

Answer 10

d. clearly and accurately set forth the appraisal in a manner that will not be misleading.