Module 21 Quiz Flashcards
Isaiah performed an appraisal ordered by Wellford Mortgage when James and his wife refinanced with them. James phoned this morning requesting his wife’s name be removed from the report. He would like to use the report in their divorce proceedings. After paying a heavy fee for his rush appraisal, he feels he is entitled to this change. How should Isaiah respond?
A) Isaiah should comply with what James has asked. The scope of work for James and his wife’s refinance would have included the fact that the intended use was to secure financing for the dwelling. James, being the
intended user, can order the scope of work to be adjusted for his new purpose.
B) Isaiah should offer to accommodate James to use the appraisal for the divorce; however, the wife’s name will have to remain. Even though the scope of work for James and his wife’s refinance would have included the
fact that the intended use was to secure financing for the dwelling, since James paid for the appraisal, he is entitled to use the appraisal for any purposes involving him.
C) Isaiah should decline James’ request completely. The scope of work for James and his wife’s refinance would have included the fact that the the intended use was to secure financing for the dwelling for Wellford Mortgage,
not for James to determine his assets in the divorce.
D) Isaiah should remove the wife’s name and allow the report to be used for the divorce. Even though the scope of work for James and his wife’s refinance would have included the fact that the intended use was to secure financing for the dwelling, since James paid for the appraisal, he is entitled to use the
appraisal for any purposes involving him
C) Isaiah should decline James’ request completely. The scope of work for James and his wife’s refinance would have included the fact that the the intended use was to secure financing for the dwelling for Wellford Mortgage,
not for James to determine his assets in the divorce.
Tony purchased a two-story, brick dwelling in the central business district of Morton. The property consists of two apartments on the upper level and a commercial area on the main level. Tony plans to open an antique shop in the commercial area and continue the lease on the two apartments upstairs. He will not occupy either of the upstairs apartments as he already has a primary residence located nearby. Which is the best-cited
characteristic to be addressed in the scope of work?
A. lease simple
B. leasehold
C. fee simple
D. lease fee
D. lease fee
You receive an order for a “full” appraisal on a residential property. You try to make an appointment but are rebuffed by the occupant. The client changes the order to an “exterior only” appraisal. What part the
development process changes?
A. the report format
B. the scope of work
C. the purpose of the appraisal
D. the intended user
B. the scope of work
On May 3rd, Sarah placed an order for a dwelling at 455 2nd Street in Orrville. Jonathan, the appraiser, inspected the property May 7th per the owner’s work schedule. At the time of inspection, the realtor provided a copy of the sales contract. The contract price of $210,000 was
established as of May 1st. May 9th Jonathan examined the market and chose the comparables for the sales comparison approach. The file was completed on May 12th and emailed to Sarah. The effective date included
in this report is
A. May 7th.
B. May 12th.
C. May 1st.
D. May 9th
A. May 7th.
Note: The effective date is the date of inspection. The market changes daily. A value needs to be established as of a specific date. If the homeowners decided to gut their kitchen the day after the property was inspected, the appraiser would still establish the value as it stood at the time of inspection.
The decision to exclude an approach to value is part of
A. the intended use decision.
B. the assignment elements decision.
C. the report format decision.
D. the scope of work decision
D. the scope of work decision
City Mortgage Co. faxed an order for their borrower to Mary Johnson, a real estate appraiser. The borrower is the subject property’s current tenant. City Mortgage Co. intends to use the appraisal in a market transaction allowing the tenant to purchase the property. Mary used
Fannie Mae and Freddie Mac forms to complete the report. Who is the intended user?
A. City Mortgage Co.
B. Freddie Mac
C. Fannie Mae
D. the borrower
A. City Mortgage Co.
Appraiser Joan was hired by the Smiths. Upon consulting with the Smiths, she learned that they plan to add a landscaped pond and retreat-style patio off their rear deck with an estimated cost at $17,000. While they are looking forward to the end result, they are concerned they will not be able to recapture the cost if they choose to sell their home down the line. What
service can Joan provide for them?
A. Landscaping is considered temporary due to the amount of maintenance. Acting as an appraiser, she can establish the market value without including the landscaping.
B. Acting as an appraiser, Joan can research the market to determine how the dwelling and updated landscaping will react in terms of value.
C. Acting as a reviewer, Joan can review two values: the value of the subject in the market without the landscaping, and the value of the subject with landscaping estimates based on local nursery costs. The combined value represents the market value.
D. Acting as a consultant, Joan can review the price of the dwelling as it currently is. She can also estimate the value by adding the landscaping in a separate valuation.
B. Acting as an appraiser, Joan can research the market to determine how the dwelling and updated landscaping will react in terms of value.
Joan can act as an appraiser and research comparables that would help indicate the impact the landscaping might have in that market area. After a market analysis, the amount a buyer may pay for extensive outside areas will be indicated and represented in the overall value.
At the inspection, Jorge is told that the owner plans on adding a family room addition and wants it included in the appraised value. The client authorizes its inclusion. How should Jorge include the addition?
A. nothing is required as the client authorized its analysis
B. a hypothetical assumption is needed
C. an extraordinary assumption should be used
D. a hypothetical condition should be used
D. a hypothetical condition should be used
Roger is selling his home on 14th Street. He has decided to include the kitchen and laundry room appliances in the selling price. He provided copies of the original purchase receipts to his appraiser. How should the
appraiser treat this information?
A. Research on the brand names of the appliances would need to be included. Quality and warranties on appliances could have an impact on value. The value of the appliances and structure should be established as they are all attached, real property.
B. The appliances would be considered real property along with the structure as they are attached by hook ups. The final estimate of value would represent the value of the structure plus the cost of the appliances.
C. The home is considered personal property, and the scope of work will address this. The appliances are considered real property since they can be
moved.
D. Appliances are considered personal property. The appraiser is developing an opinion of real property, the structure, and attached improvements. Thus, the
information provided about the appliances should be disregarded when determining the market value of the real estate
D. Appliances are considered personal property. The appraiser is developing an opinion of real property, the structure, and attached improvements. Thus, the
information provided about the appliances should be disregarded when determining the market value of the real estate
Appliances are considered personal property. An appraiser’s value is established based on the real property. The appliances are recorded if they are listed on the sales contract, which the appraiser is responsible for reviewing. However, the purpose is to appraise the
structure, not the personal property.
Marge and Jack are planning to refinance their rental property which is located next door to their home. The rental property is a one-story, two-bedroom, one-bathroom dwelling with no garage, and approximately
1,200 square feet of gross living area. Shortly after meeting with the loan officer, the appraiser contacted them and inspected the rental property. All the comparable sales used in the report are single-family dwellings located in the market area. The monthly rent was not addressed in the report. Which of the following indicate the best value for this property?
A. single-family residence where the sales comparison approach is the primary method of valuation
B. single-family residence where the income approach is the primary method of valuation
C. income-producing single-family residence where the sales comparison approach and income approach are reconciled into a final valuation
D. income-producing single-family residence where the sales comparison approach receives the primary emphasis and the income approach receives the secondary emphasis
A. single-family residence where the sales comparison approach is the primary method of valuation
Note: The comparable sales used in the report indicated that single-family residences are the primary sellers in the market. The area appears to be residential with limited rentals; therefore, the sales comparison approach will indicate the best value
