AZ Real Estate Unit 16 Flashcards
Unit 16
The methodical collection and analysis of data is
Key to an accurate appraisal
Which of these three formulas is incorrect for the income approach?
Value divided by rate equals income
Appraisers are expected to follow
The Uniform Standards of Professional Appraisal Practices (USPAP)
A successful assemblage of properties may increase the value of the combined parcel in a demonstration of the principle of
plottage
Which approach to value is the most reliable for appraising a single family home
sales comparison approach
The standards of appraisal practice are
USPAP
A loss of value as the result of the markets response to an item, rather than a deterioration of the items physical condition is
Functional obsolescence
An appraiser who is estimating operating expenses is using what method of valuation
income
The data collected by the appraiser for the appraisal process includes
general data and specific data
The price under consideration in the definition of market value is
The most probable price the a property should bring
What principle of value states that if the increase of the value of the real estate is more than the cost to renovate, the sellers would financially benefit by doing the renovation
contribution
An appraisal is
an opinion of value based on supportable evidence and approach methods
What principle of value indicates that a developers very profitable real estate project will attract others to engage in similar activity in the same area and thus drive down profits?
competition
Which of the following is true about a comparative market analysis?
(The answer on the Arizona real estate test is none of the multiple choice answers they provide)
Another name for the market data approach to appraising is
The Sales comparison approach
W buys a small house in a highly desirable neighborhood consisting of large homes and pays $390,000. X buys a nearly identical house in a neighborhood of similarly sized homes and pays $290,000. What economic principle best describes why W paid more than X
progression
A developer buys the last five vacant lots in a subdivision and constructs a large, expensive home on each lot. The homes sell for what is record setting high prices for the area. The owners of the older, lesser valued houses in the neighborhood may find that the value of their homes are affected by what principle
progression
An appraiser asked for an opinion of the value of an existing shopping center would probably give the most weight to which approach to value
income approach
There are two vacant adjacent lots in an area zoned for commercial use, each worth approximately $50,000. If their owner sells them as a single lot, however, the combined parcel will be worth $120,000. What principle will this illustrate?
Plottage
The characteristics of value include the following
Scarcity
An Appraiser is responsible for
forming an opinion of value
The cost approach of value is based on the principle of
Substitution
A six bedroom home with a tennis court in a neighborhood where there are no other similar sized homes and no homes with tennis courts would most likely be subject to what principle?
Regression
Which body established the uniform standards of professional appraisal practice? (USPAP)
The Appraisal standards board
At the risk of seeming boring or monotonous properties will still be at their highest value if the neighborhood exists
conformity
The essential elements of value are
transferability, demand, scarcity and utility
Once the appraiser has considered the three methods of valuation of real estate, the final step in the appraisal process is
reconciliation
An owner is considering installing a below ground swimming pool, which will cost many thousands of dollars to build. Before hiring a contractor, the owner should consider the concept of
Contribution
Which of these is not an essential assumption in determining market value
the property must be on the market for at least three months
All of the following can result in a loss of value resulting from depreciation except
land value
