Fundamental of Real Property Appraisal - Assessment and Appraisal Theory

Question 1

The property tax is an _________ tax, meaning it is based on value.

Answer 1

ad valorem

Question 2

The assessor is responsible for the _______, ________ and ________ of all taxable property.

Answer 2

discovery, listing, valuation

Question 3

The taxable location of personal property is referred to as its _________.

Answer 3

situs

Question 4

An estimate of value, usually in writing, of an adequately described property, as of a given date, is termed ___________.

Answer 4

an appraisal

Question 5

A jurisdiction’s tax rate is determined by dividing the __________ to be derived from property tax by the total __________ ___________ of the taxing district.

Answer 5

budget, assessed valuation

Question 6

The type of value usually estimated by the assessor is __________ value.

Answer 6

market

Question 7

The ________ ______ _______ reflects the ratio between the current tax bill and the property value.

Answer 7

effective tax rate

Question 8

In order for a property to have value, it must have
_______, ________, ________, and
_________ _______ _______

Answer 8

utility, scarcity, desirability and effective purchasing power

Question 9

The use that generates the highest net return to a property over a reasonable time period is called its __________________.

Answer 9

highest and best use.

Question 10

The principle of _______ states that maximum value of a neighborhood is attained when the uses of land are perfectly complementary.

Answer 10

balance

Question 11

Which appraisal principle affirms that land cannot be valued on the basis of one use while improvements are valued on the basis of another?

Answer 11

Consistent use

Question 12

List the four test that the appraiser must make in the analysis of the highest and best use.

Answer 12

1. Legally Permissible
2. Physically possible
3. Financially feasible
4. Most productive

Question 13

________ ________ is a parcel of land and any structures or improvements that are permanently affixed thereto.

Answer 13

Real estate

Question 14

Property is considered ______ if it can be moved without causing any damage or change to either the item of property or the structure to which it is attached.

Answer 14

personal

Question 15

Assessment level times the tax rate equals the

________ _____ ________.

Answer 15

effective tax rate

Question 16

___________ is the point at which the forces of supply and forces of demand meet.

Answer 16

Equilibrium

Question 17

List two types of highest and best use analysis.

Answer 17

1. As if vacant

2. As if improved

Question 18

The typical life cycle of a neighborhood included _______, _______, _______ and __________.

Answer 18

growth, stability, decline and revitalization

Question 19

What elements of the marketplace are most likely to contribute to a change in demand?

Answer 19

Consumer tastes and preference
Consumer income
Price of related commodities
Consumer expectations
Price of the commodity

Question 20

Market value is defined as the most probable price of a property in terms of money, assuming:

Answer 20

Buyer and seller are typically motivated,
A reasonable time is allowed for exposure in the open market
Payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto.

Question 21

_________ refers to the amount of goods that producers are willing to sell at a given price during a specified time period.

Answer 21

Supply

Question 22

Ownership of all legal rights to property is limited by government in four ways:

Answer 22

Taxation
Police power
Eminent domain
Escheat

Question 23

An assessed value not statutorily at 100 percent of market value is known as a ___________ assessment.

Answer 23

fractional

Question 24

The underlying principle for the three approaches to appraisal is ____________.

Answer 24

substitution

Question 25

The seven steps of the appraisal process are as follows:

Answer 25

Definition of the problem Scope of work Preliminary survey and planning Data collection and analysis Highest and best use Application of the data and the three approaches Correlation/reconciliation to final value estimate

Question 26

The basis for the adjustments in the sales comparison approach to value is the principle of ___________.

Answer 26

contribution

Question 27

_______ ___ ____ represents the value of a property for a specific use.

Answer 27

Value in use

Question 28

List any two types of private encumbrances that can be placed on ownership of real property.

Answer 28

``` Rights of co-owners Condo and subdivision restrictions Covenants, conditions and restrictions found in the chain of title to the property Mortgages Easements and right of way Liens and judgments Leases ```

Question 29

The principle of ______________ states that value is created by the expected future benefits to be derived from the property

Answer 29

anticipation

Question 30

``` The six basic rights associated with property are as follows: Key word (SLUGER) ```

Answer 30

``` Sell Lease Use Give away Enter or leave Refuse to do any of the above ```

Question 31

The ownership of all legal rights to property is known a ______ ________ (___________)

Answer 31

fee simple (fee simple absolute)

Question 32

Determining the identity of the property to be appraised is a part of the ______ step in the appraisal process.

Answer 32

first

Question 33

The three types of boundaries used to delineate neighborhood are ___________, _________, and ________.

Answer 33

political, man-made, natural

Question 34

Under the step in the appraisal process that is termed data collection and analysis, specific data include

Answer 34

site data

Question 35

The four forces that influence value and must be considered in neighborhood analysis are as follows:

Answer 35

Physical (environmental) Economic Governmental Social

Question 36

The typical life cycle of a neighborhood can be extended or shortened by changes in _______ factors.

Answer 36

economic

Question 37

An area of complementary land uses in which all properties are similarly influenced by the four forces affecting value is termed a ___________

Answer 37

neighborhood

Question 38

Municipal services, planning and zoning are examples of __________ forces that affect neighborhoods.

Answer 38

governmental

Question 39

What are the four basic elements of supply?

Answer 39

Cost of production Price of other goods Entrepreneur expectations Number of sellers

Question 40

The basis for applying the adjustment in the sales comparison approach

Answer 40

Contribution

Question 41

A property must be valued with a single use for the entire property

Answer 41

Consistent Use

Question 42

The amount of goods that producers are willing to sell under various conditions during a given period

Answer 42

Supply

Question 43

Net income remaining after the cost of labor, management, and capital have been paid

Answer 43

Surplus productivity

Question 44

Present worth of future benefits

Answer 44

Anticipation

Question 45

Market value of a property tends to be set by the cost of acquiring an equally desirable and valuable property

Answer 45

Substitution

Question 46

Maximum value is obtained when the four agents of production attain a state of equilibrium

Answer 46

Balance

Question 47

Quantities of various goods that people are willing and able to buy during some period, given the choices available to them

Answer 47

Demand

Question 48

The tendency of social and economic forces affecting forces affecting supply and demand to shift overtime

Answer 48

Change

Question 49

Availability must be in harmony with demand. If one or the other is in excess, prices will increase or decrease

Answer 49

Competition

Question 50

The value of property depends, in part, on it relationship to it's surroundings

Answer 50

Conformity

Question 51

After a certain point, the addition of successive increments of one agent of production decreases future incomes or amenities

Answer 51

Increasing/Decreasing returns

Question 52

The value of a lower priced property is increased by its association with better properties of the same type

Answer 52

Progression