Explain the steps in the appraisal process Flashcards
The key to an accurate appraisal lies in the methodical collection and analysis of ___
data
The ___ is an orderly set of procedures used to collect and analyze data to arrive at an ultimate value conclusion
Appraisal process
What are the 2 basic classes that data is divided into during the appraisal process?
1) General data
2) Specific data
___ data covers the nation, region, city, and neighborhood.
General
___ data covers details of the subject property as well as comparative data relating to costs, sales, and income and expenses of similar properties and competitive with the subject property
Specific
What are the 7 steps in the appraisal process?
1) identify the subject property
2) determine the scope of work
3) gather, record, and verify the necessary data
4) determine highest and best use
5) form opinion of value by each of the three approaches
6) reconcile values for final opinion of value
7) report final opinion of value
The appraisal report should state the ___ and ___ of value and cite the ___ of it.
type and definition
cite the source
The appraisal report should state the ___ and intended ___ for the appraisal
purpose
intended use
The appraisal report should state the effective date of the ___ and the date of the ___
opinions of value
report
The appraisal report should state the extent of ___
scope of work
The extent of the process of collecting, confirming, and reporting the data
Scope of work
The appraisal report should list all ___ and ___ that affect the analysis, opinion, and conclusions of value
assumptions
limiting conditions
The appraisal report should describe the ___, the appraisal ___ followed, and the ___ that supports the report’s conclusions
information considered
procedures
reasoning
If an appraisal approach was excluded, the appraisal report should…
explain why it was excluded
The appraisal report should summarize the ___ used to develop the appraisal
scope of work
The appraisal report should state the ___ of the real estate existing as of the date of value and the ___ of the real estate reflected in the appraisal
use
use
The appraisal report should state the use of the real estate existing ___ and the use of the real estate ___.
as of the date of value
reflected in the appraisal
The appraisal report should describe the appraiser’s opinion of the ___ of the real estate
highest and best use
The appraisal report should state all extraordinary ___ and hypothetical ___
Extraordinary assumptions
Hypothetical conditions
The appraisal report should state that their use might have ___
affected the assignment results
The appraisal report should include signed ___ as required by the USPAP
certification
The ___ Appraisal Report is the form required by many government agencies
Uniform Residential Appraisal Report
The appraiser develops a supportable and objective report called an appraisal report that ___ indicated by the market
Verifies the value
Most appraisals are ordered by ___.
Lenders
Lenders base ___ on the appraisal value
loans
The appraiser must be able to back up the report with ___
Quantifiable conclusions
Appraisal methods are defined by the ___.
Uniform Standards of Appraisal Practice (USPAP)
Appraisers must be state-licensed or certified for an appraisal performed as part of a(n) ___ related transaction
Federally
Real estate licensees also complie data, such as a(n) ___, which is a report of market statistics that assists consumers in the listing and buying process.
Comparative market analysis (CMA)
A CMA is NOT a(n) ___.
Appraisal
A broker’s price opinion (BPO) may be used in a(n) ___ transaction
NON-federally related
A(n) ___ may be used in non-federally related transactions such as home equity lines, refinancing, portfolio management loss mitigation, and collections
Broker’s price opinion (BPO)
___ is created by demand, utility, scarcity, and transferability of a property (DUST)
Value
___ is the most probable price that property should bring in a fair sale, but it is not necessarily the same as price paid or cost to construct.
Market value
A sales comparison approach makes use of properties comparable (comps) to the subject property by ___ the value of a feature present in the subject, but absent from the comp
Adding
A sales comparison approach makes use of properties comparable (comps) to the subject property by ___ the value of a feature present in the comp, but absent from the subject
Subtracting
The cost approach estimates current reproduction or replacement cost of constructing building and other property improvements using which 4 methods?
Square foot
Unit in place
Quantity survey
Index
The cost approach estimates accrued depreciation using the ___ method
Straight line
The ___ approach is based on present value of the right to future income
Income
The ___ may be used to estimate the value of a single-family residential rental property
Gross rent multiplier
The ___ nay be used to estimate income for larger residential and commercial properties
Gross Income multiplier
In IL, the ___ requires mandatory licensure with limited exceptions for IL appraisers
Real Estate Appraiser Licensing Act
In IL, only ___ may be certified as appraisers or act as associate real estate trainee appraisers
Individuals
In IL, corporations, partnerships, firms, and groups may NOT be…
certified as appraisers
