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Florida Real Estate > Section 16 > Flashcards

Section 16 Flashcards

1
Q

can perform appraisals if the licensee informs the client that the licensee is not a certified appraiser and the licensee cannot perform an appraisal for a federally related transaction

A

Real estate licensees

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2
Q

when performing an appraisal, a real estate licensee must follow

A

USPAP

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3
Q

a provision under Title XI that mandates states to license and certify appraisers

A

The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)

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4
Q

authorized by the United States Congress as the source of professional appraisal standards and qualifications

A

The Appraisal Foundation

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5
Q

establishes the minimum education, experience, and examination requirements for real property appraisers to obtain state certification

A

The Appraisal Qualification Board (AQB) of the Appraisal Foundation

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6
Q

develops, interprets and amends the Uniform Standards of Professional Appraisal Practice (USPAP)

A

The Appraisal Standards Board (ASB)

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7
Q

maintains a database of state-certified and licensed appraisers who are eligible for federally related transaction appraisals.

A

The Appraisal Subcommittee’s (ASC)

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8
Q

There are two types of state appraisers:

A

Certified residential appraisers

Certified general appraisers

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9
Q

qualified to perform residential properties with four or less

A

Certified residential appraisers

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10
Q

qualified to perform appraisals for any type of property

A

Certified general appraisers

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11
Q

A transaction that involves a federal financial regulatory agency in either the primary or secondary mortgage market

A

federally related transaction

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12
Q

Licensees have three methods for determining value:

A

appraisal
comparative market analysis (CMA)
broker price opinions (BPO)

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13
Q

the amount paid for an item

A

Price

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14
Q

determined moment by moment dictated by how much a seller will sell a property for matching how much a buyer is willing to purchase it

A

Value

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15
Q

There are 7 types of value in real estate:

A 
assessed value for property tax purposes
insurance value
value in use
liquidation value
investment value
salvage value
market value
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16
Q

Characteristics of value include:

A

demand
utility
scarcity
transferability

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17
Q

Principles of value include:

A

Substitution
Highest and best use
Increasing and decreasing returns
Conformity

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18
Q

continuing to improve a property past the maximum value

A

Over-improvement

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19
Q

value is accomplished when a property is in symmetry with other properties

A

Conformity

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20
Q

the property that is being appraised

A

The subject property

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21
Q

Cost as close to an exact duplicate as possible of the original structure.

A

Reproduction cost

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22
Q

involves calculating the reproduction/replacement cost of the structure;
subtracting calculated depreciation;
adding the value of the land.

A

cost-depreciation approach,

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23
Q

The cost of constructing a suitable replacement

A

Replacement cost

24
Q

There are three types of depreciation:

A

Physical Deterioration
Functional Obsolescence
External Obsolescence

25
Q

To calculate accrued depreciation using the age-life depreciation method:

A 
(Effective age 
÷ 
Total economic life) 
× 
Reproduction cost new
26
Q

determines value based on future earnings

A

The income approach

27
Q

the estimated income of an investment property that is fully rented with no vacancies

A

Potential gross income (PGI)

28
Q

Potential gross income (PGI) – losses + other income =

A

Effective gross income (EGI)

29
Q

Effective gross income (EGI) – operating expenses =

A

Net operating income (NOI)

30
Q

include fixed expenses, variable expenses, and reserves for replacements of building components

A

Operating expenses

31
Q

expenses that remain the same unaffected by occupancy such as taxes.

A

Fixed expenses

32
Q

increase or decrease depending upon how the unit is used such as utilities

A

Variable expenses

33
Q

money saved for future expenses such as roofing repairs

A

Reserves for replacement

34
Q

the relationship between the net income and the present value of the property.

A

Capitalization rate

35
Q

the ratio between a property’s gross monthly rental income and the selling price expressed as a ratio

A

The gross rent multiplier (GRM)

36
Q

used when an investment property generates income from sources other than just rental income

A

A gross income multiplier (GIM)

37
Q

an estimate of value used for sellers or buyers to

determine the best price, typically performed by a real estate agent

A

Comparative Market Analysis (CMA)

38
Q

determine value based on properties recently sold, on the market, and expired

A

Comparative Market Analysis (CMA)

39
Q

the process of estimating the value of real estate.

A

Appraisal

40
Q

Combining of two or more adjoining properties into one

A

assemblage

41
Q

a computer program that will provide a quick synopsis of value

A

Automated Valuation Model (AVM)

42
Q

This approach involves finding a similar property, and reproducing the building as closely as possible, then depreciating for age and condition, etc.

A

cost-depreciation approach

43
Q

A defect, wear or utility condition that is fixable

A

curable

44
Q

A lowering in value due to any condition. Also, a write off for taxes

A

depreciation

45
Q

The lifespan that a building is useful. Usually, though not always, dictated by tax law.

A

economic life

46
Q

The most probable use of a property that is legally permissible physically, possibly financially, and results in maximum profitability

A

highest and best use

47
Q

Property situations that diminish the value of the property and are not fixable at a cost less than the cost of replacement property

A

incurable

48
Q

the highest price a willing buyer would pay, and a willing seller would accept

A

Market value

49
Q

the added value that results from the assemblage of two or more adjoining properties

A

plottage

50
Q

states that no prudent person would pay one million dollars when there is another one readily available that has the same use, design and income for five hundred thousand dollars, the lowest price one is preferred

A

Principle of substitution

51
Q

The value of an inferior property is enhanced by association with superior properties.

A

progression

52
Q

The value of a superior property is adversely affected by association with inferior properties.

A

regression

53
Q

Building a suitable replacement that will meet the same needs at the same quality but will not be exactly the same

A

replacement cost

54
Q

People’s preferences for a certain area

A

situs

55
Q

Determination of how much something is worth.

A

valuation

Florida Real Estate (20 decks)

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