Principles & Practices

Question 1

Comparable Sales Approach

Answer 1

value estimated by analyzing sale prices of similar properties

if comparable is better than subject adjust downward

if comparable is inferior to subject, adjust upward

Question 2

Cost Approach

Answer 2

Premise buyer will pay no more for existing building than cost of producing a comparable property

Use for: new construction, churches, schools, & public building

Question 3

Income Capitalization Approach

Answer 3

Value based on anticipated future income

use for large income producing properties (i.e. Apartments)

Question 4

RESPA

Answer 4

Real Estate settlement Procedures Act; Lender must disclose closing host of buyer and seller; HUD-1 form

Question 5

Condominium ownership

Answer 5

own unit plus inters in common elements

Question 6

Cooperative ownership

Answer 6

Corporation owns realestate; individuals own share and have proprietary lease and occupancy agreement