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02 Basic App Proc Quiz > Ch 8 Quiz > Flashcards

Ch 8 Quiz Flashcards

1
Q

“The ability of a property or building to be useful and to perform the function for which it is intended according to current market tastes and standards” is the definition of

A

functional utility

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2
Q

“The order in which quantitative adjustments are applied to the sale prices of comparable properties” is the definition of

A

sequence of adjustments

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3
Q

“The total adjustment to each comparable sale price calculated by adding the absolute values of all positive and negative adjustments” is the definition of __________ adjustment.

A

gross

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4
Q

“Divided or undivided rights in real estate that represent less than the whole, i.e., a fractional interest such as a tenancy in common, easement, or life interest” is the definition of

A

partial interest

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5
Q

A ___________ is a lump-sum payment to the lender that reduces the interest rate of the borrower’s mortgage.

A

buydown

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6
Q

A “point” is equal to _____% of a _______________.

A

1, mortgage loan amount

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7
Q

A buyer purchases a home, knowing that it needs a new roof. The buyer offers $104,000 and anticipates the cost of the roof to be $4,000. The roof actually ends up costing $8,000 because of unforeseen circumstances. How much should this sale be adjusted for expenditures made immediately after purchase?

A

plus 4000

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8
Q

A comparable sale required the following adjustments: +8,000, -4,500, +5,000, ­-2,000, -­1,000. What is the net adjustment?

A

5500

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9
Q

A property sold for $183,950, and the purchaser made no significant improvements. One year later it sold again for $195,000. What is the percentage of increase indicated by this sale?

A

6%

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10
Q

A property sold for $200,000, there was a $20,000 down payment and the rest was in the form of a 30 year mortgage at 6% interest. The seller paid 3 points at the closing. How much was that?

A

5400

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11
Q

A property was put on the market on January 10th, and an agreement of sale was signed on February 8th. Due to issues with the home inspection, the sale did not close until July 15th. An appraiser is using this property as a comparable sale on an appraisal with an effective date of October 19th. The appraiser’s market conditions adjustment should reflect the change in market conditions between

A

February 8th and October 19th

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12
Q

According to Fannie Mae, all of these are unacceptable appraisal practices EXCEPT

A

use of comparables that are over six months old

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13
Q

According to the requirements of the Uniform Appraisal Dataset, an appraiser is required to rate a location as

A

N, B, or A

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14
Q

Adjustments for physical characteristics could include all of the following items EXCEPT

A

busy street

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15
Q

Adjustments should be made when there are ____________ differences between the subject property and a comparable sale.

A

significant and measurable

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16
Q

All of the following are required exhibits for a Fannie Mae appraisal report EXCEPT

A

a title page and letter of transmittal

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17
Q

An appraisal of which of these types of properties would NOT be reported using the Fannie Mae URAR form?

A

a unit in a shopping mall

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18
Q

An appraiser uses a comparable sale that sold as a result of the owner’s bankruptcy, and the appraiser adjusts the sale because it is not an arms-length transaction. This is an example of ___________ adjustment.

A

a conditions of sale

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19
Q

An appraiser uses a comparable sale that sold due to a divorce, and adjusts it because it is not an arms-length transaction. This is an example of a ___________ adjustment.

A

conditions of sale

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20
Q

Bob grants his aunt, Mary, the right to occupy a property he owns for the rest of her life. In this situation, Mary is the

A

life tenant. Assuming the right of occupancy transfers back to Bob upon Mary’s death, Bob is the remainderman

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21
Q

Condos in your city sold for a median price of $195,320 twelve months ago and the median price of condos for the current month is $219,540. What is the percentage of change in market conditions?

A

12.4%

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22
Q

Fannie Mae and Freddie Mac require an appraiser to base his or her analysis and any adjustments to comparable sales on

A

market data

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23
Q

Fannie Mae says that positive adjustments for sales or financing concessions

A

are not acceptable

24
Q

Fannie Mae’s guideline for net adjustments is _____% of the sale price of the comparable.

A

There is no set amount

25
Q

For appraisals prepared using the UAD, quality of construction for the subject and comparables is rated using

A

a scale from Q1 through Q6

26
Q

GLA includes ___________ but not____________.

A

above grade heated area, garages

27
Q

Gross building area (GBA) is used as a unit of measurement for

A

2-4 unit properties

28
Q

If you are appraising a multi-unit property, where at least one unit is rented, the property rights appraised consist of a _______________.

A

leased fee estate

29
Q

In a UAD­-compliant appraisal report, how would the date October 30, 2018 be formatted?

A

10/30/2018

30
Q

In your sales grid, you made adjustments of +$4,000, +$3,500, - $1,500, + $7,000, and - $2,000. How much is your net adjustment?

A

11000

31
Q

Market condition adjustments to comparable sales should always be calculated from the time of the _________ to the ____________.

A

contract, effective date of the appraisal

32
Q

Market conditions adjustments are referred to by some appraisers as _________ adjustments.

A

time

33
Q

Susan owns a home on leased land. Which term best describes her ownership interest in the property?

A

leasehold

34
Q

The acronym UAD stands for

A

Uniform Appraisal Dataset

35
Q

The biggest difference between real estate and other major investments is

A

real estate is fixed in location

36
Q

The Fannie Mae URAR form is designed to report an appraisal of

A

a one-unit property with accessory unit. The URAR form states “This report form is designed to report an appraisal of a one-unit property or a one-unit property with an accessory unit; including a unit in a planned unit development (PUD). This report form is not designed to report an appraisal of a manufactured home or a unit in a condominium or cooperative project.”

37
Q

The first element in the sequence of adjustments is usually

A

property rights conveyed

38
Q

The first step in the life cycle of a market area is

A

growth

39
Q

The second phase of the neighborhood life cycle is

A

stability

40
Q

The third step in the life cycle of a market area is

A

decline

41
Q

The URAR requires you to enter in the ________ age of the subject property in the sales comparison grid.

A

actual

42
Q

True or False: According to the Fannie Mae Selling Guide, an appraiser must make dollar-for-dollar adjustments for the amount of the sales concession.

A

FALSE

43
Q

True or False: Adjustments for market conditions are always negative.

A

FALSE

44
Q

True or False: Adjustments in the sales comparison approach for economic characteristics are typically only made for commercial or income-producing properties.

A

TRUE

45
Q

True or False: An appraiser can adjust a comparable sale to account for differences in the motivation of the buyer or seller in the transaction

A

TRUE

46
Q

True or False: Every difference between a subject property and a comparable sale requires an adjustment.

A

FALSE

47
Q

True or False: In a residential appraisal, the comparable sales must always be located in the same market area as the subject.

A

FALSE. It is preferable that the comparables be located in the same market area as the subject, but it is not required. This could result in an appraiser making a location adjustment.

48
Q

USPAP requires a prior sales history of _______ year(s) for the __________.

A

three, subject property

49
Q

What type of comparison provides the BEST evidence for a market conditions adjustment?

A

sale and re-sale

50
Q

When adjusting a comparable sale for financing terms in an FHA appraisal, FHA instructs the appraiser to adjust

A

downward

51
Q

When calculating room and bathroom count in a residential property, how is a “three­-quarter bath” typically counted?

A

as a full bath

52
Q

When completing an appraisal using the Uniform Appraisal Dataset, in the “Age” section of the sales comparison grid, the appraiser is required to enter

A

actual age only

53
Q

When valuing real property, the value of the whole _______________ the sum of the estates or parts.

A

may be equal to, greater than, or less than

54
Q

Which of these elements in the adjustment process does NOT apply primarily to commercial or income producing properties?

A

physical characteristics

55
Q

Which of these items is NOT required by Fannie Mae to be included as an exhibit in an appraisal report?

A

a copy of the deed or legal description.

56
Q

Which of these ownership types is NOT a form of concurrent ownership?

A

Tenancy in severalty

57
Q

Which would be an example of a sales or financing concession – when the seller

A

pays an interest rate buydown, holds a mortgage at a below market rate, pays loan origination fees

02 Basic App Proc Quiz (21 decks)

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