Chapter 16 Flashcards
A study by Real estate agent/broker intended to assist an owner in establishing a listing price
Comparative market analysis (CMA)
How do you do a comparative market analysis? (3 steps) 
- 3 recent comparable sales (sold)
- 3 properties currently on the market
- 3 properties that failed to sell (expired)
An estimate of a properties valuation is done by who?
Appraiser
What does an appraiser do?
Estimate a property’s value
What are the 3 ways that real estate can be appraised?
Sales comparison approach
Cost approach
Income Capitalization approach
Which appraiser approach estimates the value of a property based on the income it generates?
Income capitalization approach
What does the income capitalization approach do in terms of appraisers?
They estimate the value of a property based on the income that it generates
The present worth of future benefits is?
Value
What is it called when the seller is ready to sell, the buyer is ready to buy, and nobody is under pressure?
Market value
What is market value?
When the seller is ready to sell, the buyer is ready to buy, and no one is under pressure
What kind of approach would an appraiser have to use for a unique physical design like a church?
Cost approach
The only approach for insurance purposes used by an appraiser is?
Cost approach
When would an appraiser use the cost approach?
When comparable sales are few or nonexistent
What is the cost approach used by appraisers?
It’s used when comps are few or nonexistent
They study of properties recently sold (comps) 
Sales comparison approach
Which approach would an appraiser use when simply studying properties that were recently sold?
Sales comparison approach
The most likely price that would be paid by an informed buyer one property is widely exposed on the market is known as? (school)
The market value
When an appraiser performs an appraisal on a subject property where a real estate agent is the listing agent for the seller what happens to the agents role?
It becomes more of a passive role during this process
School:
The income approach to appraisal is most appropriate for what?
A. A ranchhouse
B. A vacant lot
C. An apartment house
D. A library
An apartment house
School
The sales comparison approach to appraisal utilizes?
A. Building costs in the area
B. Recent sales prices of similar parcels
C. Asking prices for property on the market
Recent sales prices of similar parcels
The expression “arm’s-length transaction” is defined as a transaction between who?
Relative strangers
An example of external obsolescence might be
A. used car lot next-door
B. Poor floor plan
C. Faulty heating system
D. Tenant who will not pay rent
used car lot next-door
The principle of value that states that two adjacent parcels of land combined into one larger parcel may have a greater value than the two parcels value separately is called ?
Plottage
An appraiser is asked to estimate the market value of a church. He will give the most emphasis to which appraisal approach?
Cost approach
The greater the supply
Prices fall
The amount of goods or services that will be offered in the marketplace in exchange for any given products is
A. Market
B. Cost
C. Value
D. Price
Value
Goods and services in exchange for…
Value
How do you appraisers derive value?
- systematic observation of appropriate market data selection
- variety of value methods
The term external obsoletes refers to
A. Faulty floor plan
B. Poor landscaping
C. Wear and tear
D. Loss of value due to issues from factors beyond the property line

D
What does an appraiser do?
Estimate value
In the final analysis, selling price for real estate is set by?
A. Seller
B. Broker
C. Buying public
D. CMA
C buyers
