Ch 8 Quiz Flashcards
“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
functional utility
“The order in which quantitative adjustments are applied to the sale prices of comparable properties” is the definition of
sequence of adjustments
“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.
gross
“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
partial interest
A ___________ is a lump-sum payment to the lender that reduces the interest rate of the borrower’s mortgage.
buydown
A “point” is equal to _____% of a _______________.
1, mortgage loan amount
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?
plus 4000
A comparable sale required the following adjustments: +8,000, -4,500, +5,000, -2,000, -1,000. What is the net adjustment?
5500
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?
6%
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?
5400
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
February 8th and October 19th
According to Fannie Mae, all of these are unacceptable appraisal practices EXCEPT
use of comparables that are over six months old
According to the requirements of the Uniform Appraisal Dataset, an appraiser is required to rate a location as
N, B, or A
Adjustments for physical characteristics could include all of the following items EXCEPT
busy street
Adjustments should be made when there are ____________ differences between the subject property and a comparable sale.
significant and measurable
All of the following are required exhibits for a Fannie Mae appraisal report EXCEPT
a title page and letter of transmittal
An appraisal of which of these types of properties would NOT be reported using the Fannie Mae URAR form?
a unit in a shopping mall
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 conditions of sale
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.
conditions of sale
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
life tenant. Assuming the right of occupancy transfers back to Bob upon Mary’s death, Bob is the remainderman
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?
12.4%
Fannie Mae and Freddie Mac require an appraiser to base his or her analysis and any adjustments to comparable sales on
market data
Fannie Mae says that positive adjustments for sales or financing concessions
are not acceptable
Fannie Mae’s guideline for net adjustments is _____% of the sale price of the comparable.
There is no set amount
For appraisals prepared using the UAD, quality of construction for the subject and comparables is rated using
a scale from Q1 through Q6
GLA includes ___________ but not____________.
above grade heated area, garages
Gross building area (GBA) is used as a unit of measurement for
2-4 unit properties
If you are appraising a multi-unit property, where at least one unit is rented, the property rights appraised consist of a _______________.
leased fee estate
In a UAD-compliant appraisal report, how would the date October 30, 2018 be formatted?
10/30/2018
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?
11000
Market condition adjustments to comparable sales should always be calculated from the time of the _________ to the ____________.
contract, effective date of the appraisal
Market conditions adjustments are referred to by some appraisers as _________ adjustments.
time
Susan owns a home on leased land. Which term best describes her ownership interest in the property?
leasehold
The acronym UAD stands for
Uniform Appraisal Dataset
The biggest difference between real estate and other major investments is
real estate is fixed in location
The Fannie Mae URAR form is designed to report an appraisal of
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.”
The first element in the sequence of adjustments is usually
property rights conveyed
The first step in the life cycle of a market area is
growth
The second phase of the neighborhood life cycle is
stability
The third step in the life cycle of a market area is
decline
The URAR requires you to enter in the ________ age of the subject property in the sales comparison grid.
actual
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.
FALSE
True or False: Adjustments for market conditions are always negative.
FALSE
True or False: Adjustments in the sales comparison approach for economic characteristics are typically only made for commercial or income-producing properties.
TRUE
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
TRUE
True or False: Every difference between a subject property and a comparable sale requires an adjustment.
FALSE
True or False: In a residential appraisal, the comparable sales must always be located in the same market area as the subject.
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.
USPAP requires a prior sales history of _______ year(s) for the __________.
three, subject property
What type of comparison provides the BEST evidence for a market conditions adjustment?
sale and re-sale
When adjusting a comparable sale for financing terms in an FHA appraisal, FHA instructs the appraiser to adjust
downward
When calculating room and bathroom count in a residential property, how is a “three-quarter bath” typically counted?
as a full bath
When completing an appraisal using the Uniform Appraisal Dataset, in the “Age” section of the sales comparison grid, the appraiser is required to enter
actual age only
When valuing real property, the value of the whole _______________ the sum of the estates or parts.
may be equal to, greater than, or less than
Which of these elements in the adjustment process does NOT apply primarily to commercial or income producing properties?
physical characteristics
Which of these items is NOT required by Fannie Mae to be included as an exhibit in an appraisal report?
a copy of the deed or legal description.
Which of these ownership types is NOT a form of concurrent ownership?
Tenancy in severalty
Which would be an example of a sales or financing concession – when the seller
pays an interest rate buydown, holds a mortgage at a below market rate, pays loan origination fees
