Chapter 5 - Basic Appraisal Concepts Flashcards
Modern definitions of the word “appraisal” have replaced the word estimate with ________.
An appraisal is defined as: The act or process of developing an _________ of value.
opinion
“An identified parcel or tract of land, including improvements, if any” is the definition of
Real Estate
An appraisal is best described as
- an opinion of value
- the estimated cost to replace the property
- a guarantee of the true worth of the property
- an estimate of value
An opinion of value
Land is a long-lasting asset and has a long economic life as compared to other assets. What characteristic of land does this refer to?
- unique location
- immobility
- durability
- finite supply
durability
Which of these items is LEAST likely to be considered part of the real estate?
- rose bushes
- central air conditioner
- chandelier
- window air conditioner
Window Air Conditioner
“The interests, benefits, and rights inherent in the ownership of real estate” is the definition of
- real estate
- real property
Real Property
True or False? By exercising one of his/her bundle of rights, a property owner may be giving up another one of those rights from the bundle.
True
The Fifth Amendment to the U.S. Constitution guarantees payment of ________ for the taking of private property.
- just compensation
- top dollar
- an equally desirable substitute property
- time and money
Just compensation
True or False? When people buy and sell land and buildings in the marketplace, they are actually buying and selling real property rights.
True
A property owner hires a contractor to construct an addition on his home, but does not pay the contractor when the work is completed. The contractor may place a __________ on the property to recover the debt.
Mechanic’s lien
Private restrictions on property rights include all of the following EXCEPT
- mortgages
- escheat
- mechanic’s liens
- deed restrictions
Escheat
Which of the following would likely NOT be considered personal property?
- area rug
- washing machine
- wall to wall carpet
- drapes
Wall to wall carpet
The right of government that gives the state titular ownership of a property when its owner dies without a will or any ascertainable heirs is call ______?
Escheat
Which is NOT a characteristic of land?
- durability
- mobility
- unique location
- finite supply
Mobility
“The interests, benefits, and rights, inherent in the ownership of real estate” is the definition of
Real Property
Trade fixtures are only found in ___________ property.
Rented
Public limitations on private property rights include all of the following EXCEPT
- CC&Rs
- taxation
- eminent domain
- escheat
CC&R’s
“A pledge of a described property interest as collateral or security for the repayment of a loan under certain terms and conditions” is the definition of
Mortgage
“The right of government, through which property is regulated, to protect public safety, health, morals, and general welfare” is the definition of
Police Power
__________ rights are considered to be vertical rights.
Air
Which is NOT a public restriction of private property rights?
- taxation
- easement
- police power
- escheat
Easement
“A development right that cannot be used by the landowner, or that the owner chooses not to use, but can be sold to landowners in another location” are called ___________________ rights.
Transferable Development
Another name for trade fixture is
Chattel Fixture
The right of government to take private property for public use upon the payment of just compensation is called
Eminent Domain
Police power would include all of the following EXCEPT
- building codes
- zoning
- taxation
- fire codes
Taxation
“The right of government, through which property is regulated, to protect public safety, health, morals, and general welfare” is the definition of
Police Power
The public restriction on property rights that allows the government to place a lien on a property is
Taxation
Physical land and appurtenances attached to the land is the definition of
- real estate
- real property
Real Estate
The right of government to take private property for public use upon the payment of just compensation is called
Eminent Domain
Public limitations on private property rights include all of the following EXCEPT
- CC&Rs
- taxation
- eminent domain
- escheat
CC&R’s
“a valuation service that is provided by an appraiser as a consequence of an agreement with a client.” is a definition of __________?
Appraisal
The process of eminent domain is administered through
- escheat
- condemnation
- just compensation
- police power
Condemnation
“Land and all things that are a natural part of the land, e.g., trees and minerals, as well as things that are attached to the land by people, e.g., buildings and site improvements. All permanent building attachments such as plumbing, heating and cooling systems; electrical wiring; and built-in items like elevators or lifts “ is a definition of?
Real Estate
the physical thing, tangible thing that we can see and touch it is:
- real estate
- real property
real estate
Name 4 important characteristics of land:
- Unique location
- Immobility
- Durability
- Finite Supply
The rights to the use and profits of the underground portion of a designated property; usually refers to the right to extract minerals or the right to construct and maintain tunnels, subways, subcellars, pipelines, sewers - is a definition of
Subsurface Rights
“The right to undisturbed use and control of designated air space above a specific land area within stated elevations.” is a definition of?
Air Rights
Air rights may be acquired to construct a building above the land or building of another or to protect the light and air of an existing or proposed structure on an adjoining lot.
What are Transferable development rights?
A development right that cannot be used by the landowner, or that the owner chooses not to use, but can be conveyed to landowners in another location or leased for a period of years to then revert back to the original owner
“An article that was once personal property but has since been installed or attached to the land or building in a rather permanent manner so that it is regarded in law as part of the real estate.” is a definition of?
Fixture
(don’t mistake with Trade Fixture!)
What is Personal Property?
Personal property is generally something that is portable. We can pick it up (or load it on the back of a truck or trailer) and take it with us.
Any tangible or intangible article that is subject to ownership and not classified as real property, including identifiable tangible objects that are considered by the general public as being “personal” such as furnishings, artwork, antiques, gems, and jewelry, collectibles, machinery and equipment; and intangible property that is created and stored electronically such as plans for installation art, choreography emails, or designs for digital tokens. (USPAP, 2020-2021 ed.)
The appraisal of personal property is covered in STANDARDS ? and ? of USPAP.
7 & 8
What are Trade Fixtures?
Articles placed in or attached to rented buildings by a tenant to help carry out the trade or business of the tenant are generally regarded as trade fixtures. For example, a tenant’s shelves used to display merchandise are trade fixtures and retain the character of personal property, as opposed to all other fixtures that were but are no longer personal property when they are attached to and become part of the real estate. Despite the consensus on the concept of trade fixtures in general, applicable law and custom govern when a specific item is a trade fixture in a particular assignment. Also called chattel fixture.
“An interest or interests in real estate. ” is a definition of
Real property
Real property is what we appraise. When you appraise real property, it is vital that you research and understand what particular property _______ (i.e., the property interest) you are appraising. Then you need to identify the property interest being appraised in your appraisal report.
rights
The bundle of ________ includes the _________ to:
- Use the property
- Sell it
- Lease it
- Give it away
- Transfer it by will or trust
- Choose not to do anything
rights
