Chapter 16 Flashcards
What does USPAP stand for?
Uniform Standards of Professional Appraisal Practice
Are sales associates permitted to perform appraisals?
Yes
When can a sales associate not perform an appraisal?
A sales associate cannot perform an appraisal when the money is federally related. Meaning when a loan is being made based on the appraisal
What is a BPO?
A broker’s price opinion
What is a written opinion of value?
Broker’s price opinion, (BPO)
What is a CMA?
Comparative market analysis
Is a sales associate required to follow the USPAP if they are performing a CMA?
No
Are sales associate permitted to perform brokers price opinions?
Yes
What is the COST of a property?
The cost of a property is how much it costs to bring it into existence, (to build it)
What is the PRICE of a property?
The price of a property is what was actually paid for the property
What is the VALUE of a property?
The value of a property is what the property is worth. This is also called the appraised value
What is market value?
Market value is what should be paid for a property. It is also called the worth of the property, the value of the property, and the appraised value of the property
What are the three approaches to appraising real property?
- Sales comparison approach 2. Cost approach 3. Income approach
Which approach would an appraiser use if he were appraising a single-family home?
The sales comparison approach
Which approach would an appraiser use if he were appraising a business like a bookstore?
The income approach
Which approach would an appraiser use if he were appraising a courthouse?
The cost approach
What is external obsolescence?
External obsolescence is a form of depreciation that an appraiser uses to deduct value from a property due to something bad outside the boundaries of the property that can’t be fixed
What are some examples of external obsolescence?
- A highway 2. A road turning into a throughfare 3. An airport
What is functional obsolescence?
Functional obsolescence is a form of depreciation that an appraiser uses to deduct value from a property due to something on the property that is not functional or does not meet today’s tastes
What are some examples of functional obsolescence?
One bathroom with four bedrooms
What are the four characteristics of value?
- Demand 2. Utility 3. Scarcity 4. Transferability
