CA RE Practice Chp 5 Listing Flashcards
What is an analysis of the competition in the marketplace that a property will face upon sale attempts?
Comparative Market Analysis aka “comps”
What is the current value of the 1-4 residential property?
Comps
How to do comp for a listing property:
Go to MLS to search __a__inventory, search how many homes sold last __b__ months, radius search __c__mile of subject property.
a) current
b) 3
c) 1/4
What appraisal method involves comparing similar type
properties, which have recently sold, to the subject property?
sales comparable approach
What appraisal method involves comparing similar type
properties, which have recently sold, to the subject property?
sales comparable approach
What’s the market data approach also known as?
sales comparable approach
What approach is used to value RESIDENTIAL PROPERTIES (1-4 FAMILY)?
sales comparable approach
Using the Principle of a, the appraiser determines
what features add or subtract value from the subject property in market data approach.
a) Contribution
What is printed out from MLS showing the tax record?
APN - assessor’s parcel number
What are the benefits of print out tax record?
Gives square footage, school district, and coordinates.
What’s the first thing the appraiser do?
Define the problem. Meaning the mathematical value of the subject property.
What happens when the appraiser value is lowered than the listed/accepted offer?
The seller needs to lower the price in order for the bank to approve the loan. The seller may get upset if the price difference is wide. So the listing agent should get as close as possible to the appraised value.
What is the appraisal method in which the value of a property is derived by estimating the replacement cost of the improvements, deducting there from the estimated accrued depreciation, then adding the market value of the land?
Cost approach
The ___ is also used when there is a lack of
comparable sales and the property does not produce any income.
COST APPROACH
What approach is used to evaluate specialty properties such as school, church, and new properties?
Cost approach
What is the loss of value of property brought
about by age, physical deterioration or
functional or economic obsolescence?
depreciation
In the cost approach, the appraiser will determine the value of the land using the ____ ____ Approach.
The appraiser values the land as if it were vacant.
Sales Comparison
An appraisal method in which the value of a property
is derived by applying a market capitalization rate to
the property’s net operating income.
Income approach
What approach is used to evaluate for commercial properties: shopping center, offices, and multi-family (5+)?
income approach
What is Net Operating Income (NOI) formula ?
Effective Gross Income - Expenses
What is the percentage of the investment the investor
will receive each year from the net income
from the property?
Capitalization rate ( cap rate )
What is the income approach formula?
Net operating income / cap rate
