CA RE Practice Chp 5 Listing

Question 1

What is an analysis of the competition in the marketplace that a property will face upon sale attempts?

Answer 1

Comparative Market Analysis aka “comps”

Question 2

What is the current value of the 1-4 residential property?

Answer 2

Comps

Question 3

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.

Answer 3

a) current
b) 3
c) 1/4

Question 4

What appraisal method involves comparing similar type

properties, which have recently sold, to the subject property?

Answer 4

sales comparable approach

Question 5

What appraisal method involves comparing similar type

properties, which have recently sold, to the subject property?

Answer 5

sales comparable approach

Question 6

What’s the market data approach also known as?

Answer 6

sales comparable approach

Question 7

What approach is used to value
RESIDENTIAL PROPERTIES (1-4 FAMILY)?

Answer 7

sales comparable approach

Question 8

Using the Principle of a, the appraiser determines

what features add or subtract value from the subject property in market data approach.

Answer 8

a) Contribution

Question 9

What is printed out from MLS showing the tax record?

Answer 9

APN - assessor’s parcel number

Question 10

What are the benefits of print out tax record?

Answer 10

Gives square footage, school district, and coordinates.

Question 11

What’s the first thing the appraiser do?

Answer 11

Define the problem. Meaning the mathematical value of the subject property.

Question 12

What happens when the appraiser value is lowered than the listed/accepted offer?

Answer 12

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.

Question 13

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?

Answer 13

Cost approach

Question 14

The ___ is also used when there is a lack of

comparable sales and the property does not produce any income.

Answer 14

COST APPROACH

Question 15

What approach is used to evaluate specialty properties such as school, church, and new properties?

Answer 15

Cost approach

Question 16

What is the loss of value of property brought
about by age, physical deterioration or
functional or economic obsolescence?

Answer 16

depreciation

Question 17

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.

Answer 17

Sales Comparison

Question 18

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.

Answer 18

Income approach

Question 19

What approach is used to evaluate for commercial properties: shopping center, offices, and multi-family (5+)?

Answer 19

income approach

Question 20

What is Net Operating Income (NOI) formula ?

Answer 20

Effective Gross Income - Expenses

Question 21

What is the percentage of the investment the investor
will receive each year from the net income
from the property?

Answer 21

Capitalization rate ( cap rate )

Question 22

What is the income approach formula?

Answer 22

Net operating income / cap rate