Exam 1 Chapter 4

Question 1

What is the role of The Appraisal Foundation (TAF)?

Answer 1

It oversees appraiser qualifications and appraisal standards

The Appraisal Foundation is a nonprofit organization that sets the standards for the appraisal profession.

Question 2

True or False: Appraisers are considered advocates in the same way attorneys are.

Answer 2

False

Appraisers are considered non-advocates, unlike attorneys who advocate for their clients.

Question 3

What must appraisers avoid to maintain ethical behavior?

Answer 3

• Receiving payment that compromises their status as disinterested third parties
• Accepting assignments with bias toward property or parties involved
• Being paid based on the closing of the loan

These practices help to ensure impartiality in the appraisal process.

Question 4

What is the first step in the valuation process?

Answer 4

Identification of the Problem

This involves identifying the client, intended users, purpose of appraisal, and effective date of valuation.

Question 5

Fill in the blank: The effective date of valuation can be current value, value at ________, or retrospective.

Answer 5

Completion

The effective date is crucial for determining the context of the appraisal.

Question 6

What should be determined in the Scope of Work?

Answer 6

• What you are being asked to do
• Required level of detail
• How to plan the appraisal
• Depth of investigation
• Quality of inspection

The Scope of Work outlines the parameters and expectations for the appraisal process.

Question 7

What three types of data are collected during the appraisal process?

Hint: think as granular as it gets, as broad as it gets, and across everything

Answer 7

• Market Area Data
• Subject Property Data
• Comparable Property Data

This data includes specifics about the market, properties, and relevant sales or listings.

Question 8

What analysis is conducted in the Data Analysis phase?

Answer 8

• Market analysis
• Demand studies
• Supply studies
• Marketability studies
• Highest and best use analysis

This analysis helps determine the property’s value based on various market factors.

Question 9

What are the three approaches to value in appraisal?

Answer 9

• Cost Approach
• Sales Comparison
• Income Capitalization

Each approach offers a different perspective on how to assess property value.

Question 10

What is the purpose of reconciliation in the appraisal process?

Answer 10

To analyze data, apply methods, and reason behind the value conclusion

Reconciliation ensures that all valuation methods are considered and weighted accordingly.

Question 11

What is the Final Opinion of Value?

Answer 11

The conclusion reached after considering all valuation methods

This opinion reflects the appraiser’s best estimate of the property’s value.