Market Identification Flashcards
The appraiser must decide how much of the market - called the _______ - he or she is concerned with for the particular assignment.
segment
Defining the market _________is the first step in the market analysis process.
segment
A custom-built high-quality home is currently listed for sale, and is the only high-value home on the market in its area. The current owner/builder was a single man who disliked his family; consequently he built a one-bedroom home to discourage any of his grown children from moving back in with him. Which statement is true?
The home has no value because it has no utility.
Even though it is the only home for sale, if it does not meet utility requirements of buyers, it has a lower value.
Because the subject is the only high-value home for sale in this area, it will sell quickly.
The seller should be able to pick and choose among the numerous offers he will be receiving.
Even though it is the only home for sale, if it does not meet utility requirements of buyers, it has a lower value.
When analyzing a market for a high-value home, what is the MOST important consideration?
the number of residents in the local community
the number of potential buyers in the market place
the number of acceptable and qualified buyers in the market for this type of property
these are all equally important
the number of acceptable and qualifies buyers in the market for this type of property
Which would NOT be an appropriate segmentation for a market analysis? Residential - single family - townhouse Residential - multifamily - 2-4 units Commercial - office - single story Residential - retail - restaurant
residential-retail-restaurant
-retail and restaurants not submarkets of residential
What would be an appraiser’s concern in analyzing the market for a high-value residential property?
How far away am I going to have to go in order to find comparable sales?
How many buyers can afford to purchase this property in this location?
Why did the owner build a home of this type in this location?
How long is this analysis going to take?
How many buyers can afford to purchase this property in this location?
One of the problems in appraising high-value homes is:
The value of high-value homes will always be less than their cost.
Many of these homes are custom built for their current owners, and may not match the needs and desires of buyers.
There are very few sales of high-value homes in a market at any given time.
There is always a buyer’s market for high-value homes
Many of these homes are custom built for their current owners, and may not match the needs and desires of buyers.
Market identification involves:
gathering general data
finding sales data
subdividing the larger market into a workable study area
preliminary analysis of anticipated conclusions
subdividing the larger market into a workable study area
There is a significant oversupply of high-value homes on the market in Community A, and demand for these homes has not increased. Which statement is FALSE?
The value of high-value homes will decline.
The value of all homes in the area will decline.
This will likely create a buyer’s market for high-value homes.
None of the above
the value of all homes in the area will decline
A prediction of future market conditions based on inferences drawn from general market information, published data, and historical trends in rents and absorption rates and occupancy for similar property types.
Inferred analysis
A prediction of future market conditions based on comparison of a quantified estimate of future demand with a quantified estimate of future supply; also known as fundamental demand analysis
Fundamental Analysis
This type of analysis examines the present worth of a future benefit. You are right if you equate that statement to the principle of anticipation.
Investment Analysis
This type of analysis will relate to the client whether the market considers such a project worthwhile – that is, whether or not the market “needs” this particular project.
Feasibility Analysis
Who is responsible for making an appropriate scope of work decision in an appraisal assignment? the client only the appraiser only the appraiser and client jointly the Appraisal Standards Board
the appraiser only
Who determines the appropriate level of analysis for appraisal assignment? the client the appraiser the state appraisal board the Appraisal Standards Board
the appraiser
What type of analysis consists of primary economic research by an analyst? econometric analysis fundamental analysis consulting analysis none of the above
fundamental analysis
Which statement is TRUE regarding the scope of work decision in an appraisal assignment?
It is the sole responsibility of the appraiser.
It is the sole responsibility of the client.
It is a decision that is made jointly by the appraiser and the client.
It is the appraiser’s decision; however the client can exercise veto power over it
it is the sole responsibility of the appraiser
What does a real estate investor expect in return for tying his or her money up in an investment property? instant liquidity to break even an acceptable rate of return unfavorable tax treatment
an acceptable rate of return
Steps in the analysis process
Survey the market
Study the market
projecting future economic growth potential
