Assignment 1 Flashcards
Which of the following statements regarding the First Principles of Value is false?
1) An initial step in an appraisal involves identifying the purpose/objective of the assignment and the date when the value opinion is to be effective.
2) Part of comprehensive legal understanding of a property includes identifying the type of ownership.
3) The definition of “value” being sought is the key consideration in the highest and best use analysis.
4) Land use regulations are a key determinant of applicable property rights
3) the definition of “value” being sought is the key consideration in the highest and best use analysis.
Which of the following statements regarding appraisal reporting is false?
1) The different reporting formats are distinguished on the degree of analysis and level of detail reported
2) Oral reports may be acceptable in court testimonies
3) Reports must be done in writing
4) The client’s purpose and intended use is one determinant of the format of the appraisal report
3) Reports must be done in writing
Which of the following statements regarding Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) is false?
1) The Real Property Appraisal Standard deals with the procedures for the development and communication of a formal opinion of value for real property and incorporates the minimum contact necessary to produce a credible report that will not be misleading.
2) According to CUSPAP, appraisal practice includes but is not limited to Appraisal, Appraisal Review, and Consulting.
3) CUSPAP dictates the form, format, and the style of reporting.
4) Adherence to CUSPAP when preparing reports can help reduce an appraiser’s exposure to civil action
3) CUSPAP dictates the form, format, and style of reporting
In today’s society, there are sometimes conflicts over the use of some lands. Environmentalists often feel that some lands should be kept for the use y society as a whole, while the owner thinks they have the right to develop it as they like, subject to zoning regulations. Which concept of value does this fall under?
1) Geographic
2) Government
3) Social
4) Economic
3) Social
Which of the following statements regarding appraisal is false?
1) The sale price may indicate the buyer’s ceiling price and the seller’s floor price.
2) A form report is most commonly used in mortgage financing for residential properties.
3) An appraiser need not differentiate between physical & legal rights of the property, as long as he uses the correct appraisal method.
4) Assessed value is established as a basis for levying property taxes.
3) An appraiser need not differentiate between physical & legal rights of the property, as long as he uses the correct appraisal method.
Which of the following statements regarding “value” is false?
1) Fair value and market value both focus on willing buyers and sellers.
2) Use value considers the property’s value in alternative uses.
3) The intended use determines which definition of value is applicable to a particular assignment
4) Assessed value is established as a basis for levying property taxes
2) Use value considers the property’s value in alternative uses
Valuation professionals may undertake assignments that extent beyond point-in-time valuation, as reflected in CUSPAP’s Consulting Standard Section 11. Which of the following assignments are most likely to be considering consulting? (2)
a) evaluating the probability of success for a real estate development project
b) providing advice to an owner on pricing her heritage home in a sale negotiation
c) evaluating a specific property to determine if it meets a client’s investment criteria
d) establishing the market value of a four-unit rental project upon completion, for insurance purposes
a) evaluating the probability of success for a real estate development project
c) evaluating a specific property to determine if it meets a client’s investment criteria
Which of the following statement regarding intended use of an appraisal is false?
1) the intended use of the report is determined by the client’s problem and/or decision to be made.
2) the client’s intended use of the report may affect the fee to be charged.
3) the client’s intended use may inform the type of report required to be completed
4) intended use is a part of CUSPAP, but not the First Principles of Value
4) Intended use is a part of CUSAPA, but not the First Principles of Value
The tenant of a small, freestanding retail building is a baker who has installed ovens for baking bread. The ovens are large and heavy, and the back wall of the building had to be removed for the ovens to be installed. The appraiser is performing a refinancing appraisal of the real estate only. How should the appraiser treat the ovens?
1) The appraiser should include the ovens in the appraisal as part of the real estate, since it would be difficult to remove them
2) the appraiser should include the ovens in the appraisal because they are worth a lot of money and will add significantly to the property value
3) the appraiser should not include the ovens because they are trade fixtures
4) the appraiser should not include the ovens because they add no value in most markets
3) the appraiser should not include the ovens because they are trade fixtures
Which criterion is not considered when distinguishing between personal property and fixtures?
1) the manner in which the item is attached
2) a lease term specifying the intention of the parties to the contract
3) the nature of the item and whether its use has been specifically adapted for use in a particular building
4) the length of time that the item has been on the property
4) the length of time that the item has been on the property
Based on the definitions of “real estate” and “real property” in this lesson, which of the following is an example of real estate?
1) Wes has granted an easement on his property so that Carl can get to the beach
2) Shelly leases her horse ranch to William for summer grazing
3) Alex has bought a house for his extended family
4) Samantha, owner of a single-storey care facility has sold the air rights to the owner of the adjacent property to allow for a higher density redevelopment for an office building
3) Alex has bought a house for his extended family
Which of the following statements regarding justified price is true?
1) Justified price always equals market value
2) Justified price is another term for synergistic value
3) Ceiling price is irrelevant in determining a justified price
4) An assignment to determine a justified price falls in the area of investment counselling
4) An assignment to determine a justified price falls in the area of investment counselling
Market value is:
1) a fact hat can be reported by the appraiser
2) always equal to sale price
3) the amount of money a property should sell for on the open market
4) relevant only when a property has been exposed to the market for three weeks or more
3) the amount of money a property should sell for on the open market
Which of the following best describes who an appraiser may owe obligations to?
1) the appraisal profession
2) clients and institutions such as lending institutions and government agencies
3) society in general
4) an appraiser may owe obligations to all of the above groups
4 ) an appraiser may owe obligations to all of the above groups
The mayor of a small town recently hired you to estimate the value of a new, one-storey, three-bay fire station. The fire station was built last year at a cost of $2.5 million (land and building). Similar-sized, one-year-old commercial buildings in comparable location are selling for $2 million. If you appraise this building for approximately $2.5 million, you probably have conveyed an opinion of :
1) market value
2) use value
3) investment value
4) value in transition
2) use value
