Unit 1 Flashcards
What is appraisal
A formal opinion of value expressed either in written or oral form that is prepared as a result of a retainer or agreement and is intended to be relied upon by identified parties and for which the member assumes responsibility
What is the professional standard for appraisers in Canada?
Appraisal Institute of Canada’s Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP)
What is the international standard for appraisers
International Valuation Standards (IVS)
What is the difference between real estate and real property
Real estate is the physical properties as well as any structures thereon. Real property is the real estate plus the added interest such as caveats, access agreements, easements, and rights of way.
What does appraisal value?
Appraisal values real property
What is the bundle of rights
The bundle of rights is the term given to the collection of intentible assets that go with the property such as rights of way and the right to use the property undisturbed.
What are the government restrictions on property ownership known as the four powers of government?
Taxation
Expropriation
Police power
Escheat
What is escheat?
The right of government that gives the province or federal government titular ownership of a property when its owner dies without a will or any ascertainable heirs
What does a finished real estate product consist of?
Land
Labour
Capital
Entrepreneurial incentive
What are the four interdependent economic factors that create value
Utility
Scarcity
Desire
Effective purchasing time
What is the technical definition of value
An economic concept reflecting the anticipation of future benefits
What does CUSPAP stand for?
Canadian Uniform Standard of Professional Appraisal Practice
Examples.
Of geographical and environmental land processes
Climate topography
distribution of natural resources, population centers, and industry
Trends in economics, population, technology, and culture
Examples of legal land characteristics
Easements
Access Rights
Water and mineral rights
Zoning
Title conveyance.
What creates value in land?
When ownership rights can be converted into something that is useful, desirable, paid for by consumers, and limited in supply
What is a societal factor of landownership
When the rights of an interested group of people conflict with the rights of the owner
What are the four concepts of value in land?
Geographic
Legal
Social
Economic
What are the components of the valuation process
Identification of the problem
Scope of work determination
Data collection and property description
Data analysis
Land value opinion
Application of the approaches to value
Reconciliation of value indications and final opinion of value
Report of defined value
Components of identification of the appraisal problem
Client
Intended use Of the assignment
Intended users of the appraisal report in addition to the client if any
Type of value and its definition
Effective date of the opinions and conclusions
Identification of relative characteristics of the property
Assignment conditions including extraordinary or special assumptions hypothetical conditions laws and regulations jurisdictional exceptions and other conditions that affect scope
In an appraisal assignment what does scope of work determination include
Which approaches to value will be used
How much data is to be gathered?From what sources from which geographic area and over what time period
The extent of the date of verification process
The extent of property inspection if any
What two important functions does market analysis serve
It provides a background against which local developments are considered
A knowledge of the broad changes that affects supply and demand gives the appraiser and indicator of how values change over time
What information does market analysis yield for cost approach
It provides the basis for adjusting for depreciation
What information does market analysis yield for income approach
It provides consideration for forces affecting supply and demand
What information does market analysis yield for direct comparison approach
Delineates the market , thereby providing comparables and the marketable amenities within those comparables
What are the three categories of employers for appraisers?
Fee appraisers
institutional appraisers
government appraisers
What are the three traits that define a profession
Integrity competence and quality work
What are the stakeholders that of a praiser has an obligation to
Clients
Third parties
Society
The appraisal profession
What are the 2 designations available from the AIC
Canadian residential appraiser
Accredited appraiser canadian institute
What are the AIC’s first principles of value
Problem identification
Property content
Legal considerations
Highest and best use
Research
Economic analysis
What are the five key characteristics of improved land
Unique
Immobile
Durable
Finite supply
Usefulness.
How do you calculate the land surplus productivity?
Determine market value for highest investments.Subtract the costs of getting it developed to that stage and the entrepreneurial incentive. The result is the land surplus productivity.
What are the principles impacting real property value
Anticipation and change
Supply and demand
Substitution
Balance
Surplus productivity
Contribution
Conformity
Externalities
What are the five professional Competencies?
Analytical thinking
Conceptual thinking
Decisiveness
Focus on quality and details
Client service orientation
