Introduction and Part 1

Question 1

A systematic set of procedures an appraiser follows to provide answers to a client’s questions about real property value best defines what?

Answer 1

The valuation process.

Question 2

1. Identify the client and intended users
2. Identify the intended use
3. Identify the type and definition of value
4. Identify the effective date of the opinion
5. Identify the relevant characteristics of the property
6. Identify any assignment conditions (such as extraordinary assumptions, hypothetical conditions, jurisdictional exceptions and laws and regulations that may apply to the assignment)

These are the six assignment elements for which step in the valuation process?

Answer 2

Identification of the problem.

Step 1 of the valuation process

Question 3

“The party or parties (i.e., individual, group, or entity) who engage
an appraiser by employment or contract in a specific assignment, whether directly or through an agent” (USPAP, Definitions) defines which assignment of identification of the problem?

Answer 3

Client

Assignment 1 of identification of the client’s problem

Step 1: Identification of the problem

Question 4

“The client and any other party as identified, by name or type,
as users of the appraisal or appraisal review report by the appraiser, based on communication with the client at the time of the assignment” (USPAP,
Definitions) defines which assignment of identification of the problem?

If a bank engages the appraiser, the bank is the client and ________ ________ of the appraisal. The borrower may pay the appraiser’s fee as part of their closing costs, and the borrower may receive a copy of the appraiser’s report, but this does not make them an ________ ________.

Answer 4

Intended user

Assignment 1 of Identifying of the client’s probelm

Step 1: Identification of the problem

Question 5

“The use(s) of an appraiser’s reported appraisal or appraisal review assignment results, as identified by the appraiser based on communication with the client at the time of the assignment.” (USPAP, Definitions)

Answer 5

Intended use

Assignment 2 of Identifying of the client’s probelm

Step 1: Identification of the problem

Question 6

The objective of an assignment—e.g., in an appraisal assignment, to develop an opinion of the defined value of a specified interest in real estate. Identifying the purpose is the same as identifying the ____ and ____of ____ to be developed.

Answer 6

Type and definition of value

Assignment 3 of Identifying the client’s probelm

Step 1: Identification of the problem

Question 7

the date of the value opinion, and it may be a past (retrospective), present (current), or future (prospective) date depending on the intended use and the intended users of the appraisal, i.e., also referred to as the date of value.

Answer 7

Effective date of the opinion

Assignment 4 of Identifying the client’s probelm

Step 1: Identification of the problem

Question 8

“Features that may affect a property’s value or marketability such as legal, economic, or physical characteristics.” (USPAP, Definitions)

Answer 8

Relevant characteristics

Assignment 5 of Identifying of the client’s probelm

Step 1: Identification of the problem

Question 9

1. Extraordinary assumption/Special assumption
2. Hypothetical condition
3. Other assignment conditions

These are the three possible ________ ________ to identify

Answer 9

assignment conditions

Assignment 6 of identification of the client’s probelm

Step 1: Identification of the problem

Question 10

Step 1: Identification of the Problem
Step 2: Scope of Work Determination
Step 3: Data collection & Property Description
Step 4: Data analysis
Step 5: Land value opinion
Step 6: Application of the approaches to value
Step 7: Reconciliation of value indications and final opinion of value
Step 8: Report of defined value

Are the steps of what process?

Answer 10

Valuation process

Question 11

1. Market area data
2. Subject property data
3. Comparable property data

Are included in which step of the valuation process?

Answer 11

Step 3: Data collection & property description

Question 12

Data that relates to the four forces that affect real property
values—social, economic, governmental, and environmental forces.

Answer 12

General Data

Step 3: Data collection & property description

Question 13

Details about the property being appraised, comparable sales and rental properties, and relevant local market characteristics.

Answer 13

Specific data

Step 3: Data collection & property description

Question 14

________ ________ ________ focuses on trends that are affected by the four forces that influence value - economic, environmental, social, and governmental.

Answer 14

Market Area Data

General Data

Step 3: Data collection & property description

Question 15

A series of related changes brought about by a chain of causes and effects. ________ are forecast through economic base analysis, statistical analysis, market analysis, and analysis of economic indicators and surveys.

Answer 15

Trends

Step 3: Data collection & property description

Question 16

Subject characteristics of land use and improvements, personal property, business assets, etc.

Answer 16

Subject property data

Specific Data

Step 3: Data collection & property description

Question 17

_______ _______ _______ is when property sales, rentals, or operating expenses are used for comparison in the valuation process.

Answer 17

Comparable property data

General data or specific data

Step 3: Data collection & property description

Question 18

The study of the supply and demand in a specific area for a specific type of property.

Answer 18

Market analysis

Step 4: Data Analysis

Question 19

The reasonably probable use of property that results
in the highest value. The four criteria that the ___________ and ___________ use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property— specific with respect to user and timing of the use—that is adequately supported and results in the highest present value.

Answer 19

Highest and best use analysis

Step 4: Data Analysis

Question 20

“The type and extent of research and analyses in an appraisal or appraisal review assignment.” (USPAP, Definitions)

Answer 20

Scope of work

Step 2 of the valuation process

Question 21

This is a condition that is contrary to what exists but is supposed for the purpose of analysis.

Answer 21

Hypothetical condition

Step 1: Identification of the problem

Question 22

“An assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

Comment: Uncertain information might include physical, legal, or economic characteristics of the subject property; or conditions external to the property, such as market conditions or trends; or the integrity of data used in an analysis.” (USPAP, Definitions)

Answer 22

Extraordinary assumption

Step 1: Identification of the problem

Question 23

An assumption, directly applicable to a specific appraisal or review, which, if found to be false, could alter the opinions or conclusions in an appraisal or review. (SVP, Definitions)

Answer 23

Special assumption

Step 1: Identification of the problem

Question 24

An appraiser has been hired to provide a valuation of a property that is known to have a contamination issue. To quantify the damage to the property, the appraiser will provide a value opinion as though the property is not contaminated for comparison purposes. What assignment condition should the appraiser use for this specific value opinion?

Answer 24

hypothetical condition

Question 25

Which of the following would be an appropriate effective date of value for an appraisal assignment of an estate that went into probate 18 months ago?

Answer 25

retrospective valuation date

This was a quiz question.

Question 26

There are valuation scenarios in which it may be permissible for an appraiser’s conclusion to be different given the same property and with the same effective date. Which of the following intended use scenarios should NOT be expected to have a significant difference in the value conclusion?

Answer 26

The first scenario is for a lender located in the subject’s geographic area and the second scenario is for a lender located in another part of the country.

These two scenarios should NOT have significant differences in the value conclusions. The intended use is likely to be the same for both scenarios.

Question 27

In a market value assignment, when must an appraiser identify the intended users of the appraisal?

Answer 27

prior to accepting the assignment

All components/assignments of problem identification (Step 1) should be identified prior to accepting the assignment.

Question 28

In which step of the valuation process does an appraiser analyze the ideal improvement for the appraised property?

Answer 28

data analysis—highest and best use

Highest and best use considers what type of improvement would be ideally suited to the property as though vacant.

Question 29

While analyzing a property’s value, an appraiser observed that some sites in the immediate area of the subject have unstable soil conditions. The subject site shows no evidence of this issue, but no determination could be made at the present time. When completing the assignment, what assignment condition should the appraiser consider in order to address this issue?

Answer 29

extraordinary assumption

The unstable soils present a situation where the information about the condition is uncertain. If the assumption is proven false, the appraiser’s conclusions would be affected.

Question 30

The intended use of an assignment guides an appraiser on the type and extent of research and analyses performed as one aspect of the valuation process. But intended use also guides the appraiser in what other aspect of the valuation process?

Answer 30

Intended use guides the report content and level of information provided.

I got this quiz question wrong and used the course handbook to find this answer.

Question 31

Which two dates must be stated in the appraisal report?

Answer 31

the effective date and the report date

These two dates are required by professional standards in order to establish whether the appraisal report represents a retrospective, prospective, or current opinion.