Part 17 Vocab

Question 1

What is the MLS and what does it stand for?

Answer 1

stands for Multiple Listing Service and is a type of electronic database for sales data
(from Part 16)

Question 2

a technique based on the premise that when two properties are equivalent in all respects but one, the value of a single difference can be measured to indicate the difference in price between the two properties

Answer 2

paired data analysis

Question 3

a type of analysis used after quantitative analysis in comparative analysis used to determine which comps are inferior, superior, or similar to the subject. It recognizes the inefficiencies of real estate markets and the difficulties of expressing adjustments with mathematical precision.

Answer 3

qualitative analysis

Types:

• Trend analysis
• relative comparison analysis
• ranking analysis
• personal interviews

Question 4

a mathematical process of analysis. Appraisers must be careful to ensure mathematical processes and results reflect the reactions of market participants.

Answer 4

quantitative analysis

Types:

• paired data analysis
• statistical analysis
• graphic analysis
• cost-analysis/cost-related adjustments
• capitalization of income differences

Question 5

A variant of relative comparison analysis. First, sales are ranked in ascending or descending order of desirability. Next, each sale is analyzed to determine the relative position of the subject property in the array. It’s a great way to visualize patterns.

Answer 5

ranking analysis

Question 6

the Sequence of adjustments (10)

Answer 6

Transactional Adjustments

1) real property rights conveyed
2) financing terms
3) conditions of the sale
4) expenditures made immediately after purchase
5) market conditions

Property Adjustments:

6) location
7) physical characteristics
8) economic characteristics
9) use/zoning
10) non-realty components of value

Question 7

a form of qualitative analysis that studies the relationships indicated by market data without recourse to quantification but instead if inferior, superior, or similar to the subject. (similar to paired analysis but without numbers.

Answer 7

relative comparison analysis

Question 8

Sales concessions are always a ____ adjustment to what?

Answer 8

always a negative adjustment to the comp (market)

remember: financing terms are adjusted to the market rather than the subject property

Question 9

net adjustments

Answer 9

the dollar amount that results after the plus adjustments offset the minus adjustments. Generally, the lower the better but it can be misleading.

Note: It’s best to keep net adjustments below 15%

Question 10

gross adjustments

Answer 10

the total dollar amount of adjustments made to each comparable sale. Generally, the lower the better the comparison.

Note: It’s best to keep gross adjustments below 25%.

Question 11

individual adjustments should not exceed __%?

Answer 11

10%

Remember: the fewer total adjustments the better (every adjustment presents an opportunity for error)