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Appraisal Class > Study > Flashcards

Study Flashcards

1
Q

Surplus land

A

Additional size (which is more than standard) doesn’t provide more utility. For example a standard size lot of 120 feet deep myself for $8 per sq. foot if a lot is 160 feet deep then the extra depth of 40 feet may only be worth $4 dollars per sq. foot the appraiser must be able to support these rates by reference to market sales data collected during their investigation.

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2
Q

Real Estate Appraisal

A

Estimate the TYPE of VALUE of a PROPERTY for SPECIFIC

PURPOSE @ a SPECIFIC DATE

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3
Q

Most common value in REAL ESTATE APPRAISAL?

A

MARKET VALUE

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4
Q

Real estate

A

Physical ASSETS

LAND + BUILDINGS

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5
Q

Real Property

A

The LEGAL RIGHTS that is ATTACHED to land.

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6
Q

Can REAL PROPERTY be touched?

A

NO

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7
Q

Can REAL PROPERTY be appraised and sold?

A

YES

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8
Q

What is a Physical entity that is IMMOBILE and TANGIBLE?

A

REAL ESTATE

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9
Q

A LEASE OR EASEMENT IS Real Property or Real estate

A

REAL PROPERTY

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10
Q

REAL ESTATE APPRAISAL

A

Estimate the Type of Value of a property for

SPECIFIC PURPOSE and SPECIFIC DATE

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11
Q

What are 3 Main Categories of Appraisal Practice.

A
  • FEE APPRAISER
  • INSTITUTIONAL
  • GOVERNMENT
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12
Q

Example of a INSTITUTIONAL APPRAISER?

A
  • Mortgage Loans

* Advise on Purchase of Investment Property

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13
Q

Characteristics of a Land/Site

A
  • IMMOBILITY
  • DEVELOPMENT
  • DURABILITY
  • DIVISIBILITY OF OWNERSHIP
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14
Q

What are the 2 terms related to VALUE

A

Objective Value:
Property based solely on the COST

Subjective value:
Value in the MINDS of Buyers and Sellers. What they PERCEIVE something to be worth

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15
Q

Price definition

A

Is WHAT YOU PAY

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16
Q

VALUE

A

Is what you Buy

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17
Q

What 4 Factors make up value?

A 
Supply 
1 UTILITY
2 SCARCITY 
Demand 
3 DESIRE
4 EFFECTIVE PURCHASING POWER
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18
Q

Do Appraisers value CHATTELS?

A

No

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19
Q

Stoves, Fridge, washer and dryer are examples of what in a home. Fixture or Chattel?

A

Chattel

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20
Q

EFFECTIVE PURCHASING POWER

A

Low interest rates and innovative Financing make buying easier and cheaper

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21
Q

T or F

Does CUSPAP dictate form, format, and style of reporting?

A

FALSE, these are determined by the users and appraisers.

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22
Q

T or F

Is a FORM REPORT most commonly used in Mortgage Financing for Residential properties?

A

True

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23
Q

What ha called the VALUE considering alternative uses?

A

HIGHEST AND BEST USE

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24
Q

What kind of Value determines the value of a property as it is currently used or for a specific use.

A

USE VALUE

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25
Q

T or F

Is INTENDED USE an important concept for both CUSPAP and First Principles of Value?

A

True

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26
Q

The Value

A

The value to be determined in an appraisal depends upon the PURPOSE and INTENDED USE the use of the appraisal

27
Q

Use value

A

Is the value of a property as it is currently used

28
Q

True or false

Our trade fixtures regarded in law as part of the real estate in appraising a real property?

A

Foss trade fixtures are not real estate and dad with the rights of real property ownership a trade fixture is to be removed by the tenant when the lease expires an example of a trade fixture is a baker having a fancy oven in their lease bakery.

29
Q

True or false

Value is never a fact but always an opinion of the worth of a property at a given time

A

True

30
Q

6 Steps of the valuation process

A
  1. Identify the problem
  2. Collect and analyze the data
  3. Apply the applicable approaches
  4. Reconcile their Approaches used
  5. Write a final reconciliation
  6. State your estimated opinion of value
31
Q

What is Marketability study?

A 
A marketability study is founded on analysis of the four factors of 
UTILITY
SCARCITY
DESIRE 
EFFECTIVE PURCHASING POWER
that create value.
32
Q

Short-term capture is referred to as ______________ whereas long-term capture is referred to as__________

A

Absorption,

Share of the market

33
Q

Legal nonconforming use

A

If the store is badly damaged more than 50% is destroyed or vacant for certain period of time that any new building would have to conform to the current zoning requirements.

34
Q

True or false
Zoning is critical to determining the highest and best use of a property and should be investigated carefully specially were changes are taking Place.

A

True

35
Q

Excess land add value and if so give an example

A

Yes. The extra line on its own or by assemblage with adjoining properties be used to create additional lots for example if you have 100 foot wide lots they can be subdivided into 3 of 33’ front foot wide lots

36
Q

Residential property is assessed at $350,000 the property mill rate for the residential class is established at 9.067 mills for every $1000 value the owner pays $9.67 in taxes

the tax payable Is calculated as follows

A

Property taxes= Mill Rate x Assessed Value / $1,000 =

9.067 x $350,000 / $1,000
= $3,173.45

37
Q

Paired sales method when determining a value of a property with extensive landscaping

A

This approach involves finding two identical or similar sales one with average and one with better than average landscaping the difference should represent the value of the above average landscaping.

38
Q

How do you find the value of not New (Mature) Landscaping on a property?

A

Use RESIDUAL APPROACH

39
Q

What is RESIDUAL APPROACH?

A

Find sales of comparable properties and deduct the site value and depreciated value of the buildings. Any residual figure might indicate the depreciated value of the landscaping.

40
Q

True or false

The Ultimate test of FUNCTIONAL UTILITY is Marketability

A

True

41
Q

True or false

QUANTITATIVE ANALYSIS develops adjustments as dollar percentage or decimal amounts quantities

A

True

42
Q

True or false
Qualitative analysis makes non-numerical adjustments such as rating comparable properties as superior or inferior to the subject ranking them and then placing the subject within the rank

A

True

43
Q

What are some examples of qualitative techniques In Direct comparison approach

A

Relative comparison analysis superior, inferior
Ranking analysis
Personal interviews

44
Q

What are some examples of quantitative techniques in the direct comparison approach

A 
P Paired data analysis
Group data analysis
Statistical analysis
Secondary data analysis
Cost analysis
Trend analysis 
graph analysis
45
Q

Replacement cost

A

Modern equivalent

46
Q

Reproduction cost

A

Exact replica

47
Q

Examples of incurable physical Depreciation

A

Decaying foundation

Carpeting that is only half worn out

48
Q

Example of physically curable depreciation

A

Old paint on a house

49
Q

The use of an Appraisal is determined by_______ needs which will determine the ______ and ________ of work and the fee to be charged

A

Client’s
Type
Amount

50
Q

First Principles of Value

A 
Problem identification 
Property content 
Legal Considerations 
Highest and Best Use 
Economic Analysis
51
Q

Real Estate

A

It is Tangible (Land+Buildings) and immobile.

52
Q 
Appraisers may do the following:
ESTIMATE \_\_\_\_\_\_\_\_
Consult on real \_\_\_\_\_\_ matters 
EXPERT\_\_\_\_\_\_\_\_\_
Review \_\_\_\_\_\_\_\_\_\_ Reports
A

VALUES
estate
WITNESS
Appraisal

53
Q

Are property values constant all the time

A

No

54
Q

What is the ratio to determine AGE/LIFE METHOD

A

EFFECTIVE AGE/ECONOMIC LIFE

55
Q

The actual age of a building may be shorter or longer than it’s EFFECTIVE AGE by determining the __________ of the property.

A

CONDITION

56
Q

If the Property is in Great condition will the EFFECTIVE AGE be > or < the ACTUAL AGE

A

< (Less than) it looks younger than it’s actual age

57
Q

What is the meaning of UTILITY

A

The ability of a product to satisfy human want need or desire

58
Q

Functional

Obsolescence

A

This represents a loss of utility where an item does not perform its proper function

59
Q

Market value is

A

The amount of money a property should sell for on the open market

60
Q

Which of the following types of value reflects a subjective relationship between a particular investor and a given investment

1) special number
2) lending number
3) market number
4) going concern

A

1) special

61
Q
  • Helps the appraiser interpret the market forces that affect the subject property.
  • Identifies the use or uses a watch the final opinion is based.
  • Helps the appraiser identify comparable properties.

What are these characteristics is which kind of analysis

A

Highest and best use analysis

62
Q

True or false

Does a data array grid only present property data not the adjustments necessary.

A

true

63
Q

Which of the land surveying methods was developed as an outgrowth of the rectangular survey system and can be used to simplify the location description of small parcels?

A

Lot and block system

Appraisal Class (2 decks)

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