Chapter 11: Specialized Valuation Services Flashcards
Why have automated valuation models increased in prevalence over the past few decades?
1.) Increased pressure from lenders for cost savings
2.) Increased pressure from lenders for faster, real time information
3.) Increased technological advances
4.) All of the above
4.) All of the above
Which of the following is LEAST likely to fit the description of an AVM?
1.) A simple spreadsheet that uses formulas to automate some appraisal calculations
2.) A multiple listing service system that shows the list value of a large number of properties in a specific market
3.) A computational intensive program that can be purchased to receive national real estate information and value estimates
4.) A computer dependent program that models real estate data to produce value estimates
2.) A multiple listing service system that shows the list value of a large number of properties in a specific market
Which of the following is LEAST likely to be described as a weakness of AVMs?
1.) It is difficult to evaluate the quality of AVMs because developers often consider their algorithms to be proprietary information
2.) There is not enough real estate sales information in the North American market
3.) It is expensive and time consuming to ensure the quality of data used in an AVM
4.) The quality of commercial AVMs in the North American market varies considerably
2.) There is not enough real estate sales information in the North American market
Which of the following assets is NOT likely to be planned for replacement or maintenance expenses within a reserve fund study?
1.) The private road leading from the public access road to the front of the unit and parkade
2.) Worn our carpeting in a strata unit
3.) The tractor cable in the elevator
4.) Repainting of the walls in the lobby
2.) Worn our carpeting in a strata unit
Which of the following BEST describes the qualifications for completing reserve fund studies or depreciation reports in BC?
1.) Holders of a certificate of authorization within the meaning of the Professional Engineers Act
2.) Members of the Appraisal Institute of Canada holding the designation of Accredited Appraiser Canadian Institute
3.) Any qualified person who has the knowledge and expertise to understand the individual components, scope, and complexity of the strata’s common property
4.) Persons who hold a certificate of practice within the meaning of the Architects Act.
3.) Any qualified person who has the knowledge and expertise to understand the individual components, scope, and complexity of the strata’s common property
Which of the following is an advantage an appraiser may have over a technical professional (professional engineer, architect, building technologist, etc.) in competing for a reserve fund study assignment?
1.) Appraisers are better qualified to incorporate potential highest and best use considerations into the long-term plan for the condo/strate
2.) Appraisers are objective and unbiased, as there is no incentive to create asset repair or replacement business for their firm
3.) An appraiser’s primary expertise is financial analysis, which is well-matched to the purpose of reserve fund studies as a financial planning tool.
4.) All of the above
4.) All of the above
Which of the following reserve funding models is MOST likely to fairly distribute the cost of common property expenditures amongst all unit holders, while minimizing the occurrence of special levies?
1.) Minimum reserve model
2.) 100% funded model
3.) Proportionate contribution model
4.) Zero balance model
2.) 100% funded model
Chris is a CRA designated appraiser conducting a reserve fund study for a large condominium in Kelowna, BC. Chris has already identified the problem and scope of work, and performed an evaluation of the stie and building. Chris is now getting ready to perform a lifecycle analysis of common elements. Which of the following is NOT a consideration that Chris must evaluate in the lifecycle analysis of the common elements?
1.) The initial cost of each common element
2.) The effective age of each common element
3.) The forecasted timing for replacing each common element
4.) The remaining life expectancy of each common element
1.) The initial cost of each common element
Which of the following is LEAST likely to be relevant in deciding on a reserve funding model for condominium boards?
1.) Aiming to keep the monthly fees low to maintain affordability in the competitive market
2.) Aiming to ensure adequacy of the reserve fund so that all common elements can be replaced at the appropriate time
3.) Aiming to keep the common elements in pristine condition to elevate the value of each owner’s lot
4.) Aiming to manage the reserve fund such that minimal special levies will be required
3.) Aiming to keep the common elements in pristine condition to elevate the value of each owner’s lot
If Reggie is a home owner who just received his property tax notice of assessment, which of the following is NOT likely to be included on his notice of assessment?
1.) Reggie’s legal name as the registered owner of the property
2.) The classification of the property for taxation purposes
3.) The statement of highest and best use
4.) Any exemptions from assessment that may apply
3.) The statement of highest and best use
Which of the following is LEAST likely to be successful in avoiding problems for Karen, a valuation consultant, who performs property tax assessment appears on behalf of clients?
1.) Karen should start with an adversarial position against the assessor to strongly represent her client’s best interests
2.) Karen should define the terms of engagement with the client at the start of the relationship
3.) Karen should report back to the client whenever subsequent, more formal steps must be taken in the assessment appeal
4.) All of the above
1.) Karen should start with an adversarial position against the assessor to strongly represent her client’s best interests
Which of the following is a valid source of information in an assessment appeal to determine if the assessed value of a property is/are reasonable?
1.) Historic floor plans and previous appraisal reports
2.) Market data such as comparable property sales prices
3.) Updated floor plans and records of home renovations, additions, or demolitions
4.) All of the above
4.) All of the above
Many provinces have established multiple levels of assessment appeals, starting with less-formal review panels, boards or tribunals. Which of the following statements regarding these lower levels of appeals is/are TRUE?
1.) If an appeal cannot be resolved at less formal tribunals, they may advance to the courts or formal appeal board
2.) The purpose of multiple levels in the assessment appeal process is to improve natural justice for home owners
3.) The assessor is typically given the option to either support their initial valuation or request a change in the assessment
4.) all of the above
4.) All of the above
Which of the following is NOT a reason for mediation becoming an increasingly popular dispute resolution alternative to arbitration?
1.) Mediation is a guaranteed method to reach a conclusive outcome
2.) Mediation is a less confrontational approach to dispute resolution
3.) Arbitration is generally more expensive and time consuming than mediation
4.) All of the above
1.) FALSE - Mediation is a guaranteed method to reach a conclusive outcome
Which of the following statements regarding Jeff Jones, CRA, who has been contracted to act as an arbitrator by the parties in a residential rent dispute is TRUE?
1.) Jeff cannot act as an arbitrator, as this is specifically precluded in CUSPAP
2.) Many commercial contracts provide guidelines for arbitration proceedings in the event of a dispute
3.) Jeff cannot act as an arbitrator unless he is appointed by the courts
4.) Information and evidence exposed in arbitration proceedings are available to the public, just like formal litigation.
2.) Many commercial contracts provide guidelines for arbitration proceedings in the event of a dispute
