Chapter 1

Question 1

6 steps for identifying the problem:

Answer 1

1. Identify client and intended users
2. Identify intended use
3. Identify the type and definition of value
4. Identify the effective date
5. Identify the relevant
   characteristics of
   the property
6. Identify any
   assignment
   conditions

Question 2

What 3 categories are used in the data collection process?

Answer 2

1. Market Area Data
2. Subject Property Data
3. Comparable Property Data

Question 3

Market Area Data

Answer 3

General characteristics
of region, city, and
neighborhood

Question 4

Subject Property Data

Answer 4

Subject characteristics of
land use and improvements,
personal property,
business assets, etc.

Question 5

Comparable Property Data

Answer 5

Sales, listings, offers,
vacancies, cost and depreciation,
income and expenses,
capitalization rates, etc.

Question 6

Two categories for data analysis:

Answer 6

Market, and Highest & Best Use Analysis

Question 7

3 approaches to value:

Answer 7

1. Sales comparison approach
2. Income capitalization approach
3. Cost approach

Question 8

Valuation process

Answer 8

A systematic set of procedures an appraiser follows to provide answers to a client’s questions about real property value

Question 9

Client

Answer 9

The party or parties (i.e., individual, group, or entity) who engage an appraiser by employment or contract in a specific assignment, whether directly or through an agent

Question 10

Intended user

Answer 10

The client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser, based on communication with the client at the time of the assignment

Question 11

Intended use

Answer 11

The use(s) of an appraiser’s reported appraisal or appraisal review assignment results, as identified by the appraiser based on communication with the client at the time of the assignment

Question 12

identifying the purpose is the same as identifying the___

Answer 12

type and definition of value

Question 13

Purpose of an assignment

Answer 13

The objective of an assignment—e.g., in an appraisal assignment, to develop an opinion of the defined value of a specified interest in real estate

Question 14

effective date

Answer 14

the date of the value opinion

Question 15

What two dates must be reported?

Answer 15

effective date and the report date

Question 16

Relevant characteristics

Answer 16

Features that may affect a property’s value or marketability such as legal, economic, or physical characteristics

Question 17

Physical characteristics

Answer 17

Attributes of a property that are observable or measurable as a matter of fact, as distinguished from opinions and conclusions, which are the result of some level of analysis or judgment

Question 18

Extraordinary assumption

Answer 18

An assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions

Question 19

Special assumption

Answer 19

An assumption, directly applicable to a specific appraisal or review, which, if found to be false, could alter the opinions or conclusions in an appraisal or review

Question 20

Hypothetical condition

Answer 20

This is a condition that is contrary to what exists but is supposed for the purpose of analysis

Question 21

Other assignment conditions

Answer 21

might include laws, regulations, guidelines, and other conditions that can affect the scope of work

Question 22

Scope of work

Answer 22

The type and extent of research and analyses in an appraisal or appraisal review assignment

Question 23

General data

Answer 23

Data that relates to the four forces that affect real property values—social, economic, governmental, and environmental forces

Question 24

Specific data

Answer 24

Details about the property being appraised, comparable sale and rental properties, and relevant local market characteristics

Question 25

Trend

Answer 25

A series of related changes brought about by a chain of causes and effects. Trends are forecast through economic base analysis, statistical analysis, market analysis, and analysis of economic indicators and surveys

Question 26

Market analysis

Answer 26

The study of the supply and demand in a specific area for a specific type of property.

Question 27

Highest and best use

Answer 27

The reasonably probable use of property that results in the highest value

Question 28

The four criteria that the highest and best use must meet are _____

Answer 28

1. legal permissibility 2. physical possibility 3. financial feasibility 4. maximum productivity

Question 29

2 options for land as though vacant:

Answer 29

improve, leave vacant

Question 30

3 options for property as improved:

Answer 30

leave as is, alter, demolish

Question 31

A tax appeal assignment will commonly involve a ______ effective date

Answer 31

retrospective

Question 32

Intended use affects both appraisal _____ and reporting

Answer 32

development

Question 33

A systematic procedure appraisers can employ to provide the answer to a client’s question about the value of a property is called the _______

Answer 33

valuation process

Question 34

In ______ analysis, the appraiser analyzes the ideal improvement for the property

Answer 34

highest and best use analysis

Question 35

The relevant characteristics of a property are part of ___ the problem

Answer 35

identifying

Question 36

T/F: Scope of work is the type and extent of research and analyses in an appraisal or appraisal review assignment

Answer 36

True

Question 37

T/F: Identifying relevant characteristics of the subject property is specific data rather than general data

Answer 37

True

Question 38

T/F: The client and intended user are never the same

Answer 38

False

Question 39

T/F: A prospective appraisal has an effective date contemporaneous with the date of the report

Answer 39

False

Question 40

T/F: Developing an opinion of insurable value can be identified as the purpose of an appraisal assignment

Answer 40

True