Module 9 Flashcards

1
Q

The preferred phrase that we use when we refer to the appraiser’s conclusions in an appraisal is called a

A

value opinion

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2
Q

A value conclusion is always referenced as _______

A

an opinion rather than an estimate

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3
Q

Market Value is based upon the economic concept of

A

exchange value.

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4
Q

Market value is expressed as the ___________price. These words must be present in order to define market value. This phrase, however is actually quite recent. The previous working was the highest price paid, which was the standard used by lending institutions until the mid 1980’s.

A

Most probable

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5
Q

As of a ________date. The appraiser’s report will refer to this component as the effective date of the appraisal.

A

specified

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6
Q

The _______ date is simply the date of the value opnion.

A

effective

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7
Q

Effective date can be expressed in one of three ways:

A
  1. Retrospective (past)
  2. Current
  3. Prospective (future)
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8
Q

An analytical process in which the sale price of a transaction with nonmarket financing or financing with unusual conditions or incentives is converted into a price expressed in terms of cash or its equivalent.

A

Cash equivalency analysis

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9
Q

The critical issue about cash equivalency is how you analyze market sales. This is because____________________

A

cash equivalency adjustments are made to the comparable sales used in your analysis. Adjustments are not made to the subject.

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10
Q

Concessions usually result in

A

artificially inflated sale prices or lease rates

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11
Q

The sale price of a comparable sale is adjusted by __________________

A

the full amount that a seller concession affected the price.

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12
Q

This book looks at points as to reduce the actually mortgage amount not the interest rate.

A

Wierd

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13
Q

The fourth component of market value is

A

Reasonable exposure.

The typical amount of time it takes to sell a similar property. One day or 360 days should raise a caution flag.

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14
Q

Market value is the _______ price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably and for self-interest, and assuming that neither is under under duress.

A
Most probable price
specified date
cash equivalent
reasonable exposure
buyer and seller acting prudently, knowledgeably
not under undue duress
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15
Q

When we use the term arms-length transaction we mean_____________

A

the parties are not related

either through a business partnership or blood relationship.

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16
Q

Expense rates, rental rates, and capitalization rates are best expressed as_______

A

estimates