Unit 16 Real Estate Appraisal Notes

Question 1

Appraisal

Answer 1

Provides the appraisers opinion of the value based on supportable evidence and appraisal methods defined as Uniform Standards of Professional Appraisal Practice (USPAP)

Question 2

Appraiser

Answer 2

Must be state licensed or certified for appraisal performed as part if a federally related transaction.

Question 3

Appraiser qualifications board

Answer 3

Sets minimum education and experience requirements for licensing or certification

Question 4

Appraiser practices board

Answer 4

Recommends acceptable business practices

Question 5

Comparative market analysis (CMA)

Answer 5

is a report by a real estate professional of market statistics, but is not an an appraisal

Question 6

Brokers price opinion (BPO)

Answer 6

May be used in transactions involving home equity lines, refinancing, portfolio management, loss mitigation, and collections.

Question 7

Value

Answer 7

Created by demand, utility, scarcity, and transferability of property (DUST)

Question 8

Market value

Answer 8

The most probable price that a property should bring in a fair sale, but not necessarily the same as the price paid for the cost to construct

Question 9

Highest and best use

Answer 9

The use that is physically possible, legally permitted, economically or financially feasible, and the mist profitable or maximally productive

Question 10

Plottage

Answer 10

The Increase in value that can result when two or more parcels of land are combined in the process called assemblage.

Question 11

Assemblage

Answer 11

The combining of two or more adjoining lots into one larger tract to increase their total value

Question 12

Progression

Answer 12

Is in evidence when a property’s value is enhanced because of more valuable properties in the vicinity

Question 13

Regression

Answer 13

Is in effect When a property’s value is lower because of less valuable properties in the vicinity

Question 14

Sales comparison approach

Answer 14

Makes use of sales of properties comparable to the property that is the subject of the appraisal by adding or subtracting from the sales price of each comp the value if a feature present or absent in subject property versus the comparable

Question 15

Cost approach

Answer 15

The process of estimating the value of a property by adding to the estimated land value the appraisers estimate of the reproduction or replacement cost of the building, less depreciation

Question 16

Physical deterioration

Answer 16

A reduction in a property’s value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear

Question 17

Functional obsolescence

Answer 17

A loss of value yo an improvement to real estate arising from problems of design or utility

Question 18

External obsolescence

Answer 18

Incurable depression caused by factors nit on the subject property, such as environmental or economic factors.

Question 19

Reconciliation

Answer 19

Is the process by which the validity and reliability of the results of the approaches ti value are weighed objectively to determine the appraisers final opinion of value

Question 20

Property inspection waiver (PIW)

Answer 20

An option to waive an appraisal for an eligible loan purchase by Fannie Mae

Question 21

General data

Answer 21

Nation
Region
City
Neighborhood

Question 22

Specific data

Answer 22

Subject site
Improvements

Question 23

Data for each approach

Answer 23

Sales data
Cost data
Income and expenses