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modern real estate principles 2 > unit 2 > Flashcards

unit 2 Flashcards

1
Q

A car dealership along a roadway is so successful that other dealerships begin opening along the same road. This is an example of which appraisal principle?

A

Competition

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2
Q

When collecting and analyzing data for an appraisal, the appraiser should verify the data by checking information from atLEASThow many different sources?

A

Two

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3
Q

When interest rates are so high that most potential buyers cannot afford to get a loan and property values are declining, this refers to

A

the demand for the property.

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4
Q

The value of a commercial property increases because it is believed a major highway interchange might be built close to it. This is an example of the principle of

A

anticipation.

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5
Q

Adding more bathrooms to a three-bedroom house that has only one bathroom may be an example of

A

incurable functional obsolescence.

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6
Q

The first step in the appraisal process is to state the problem or purpose of the appraisal. The second step is to

A

list the data needed and the sources.

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7
Q

When appraisers evaluate the facts and form a final opinion of value for a property, they are

A

reconciling valuation approaches.

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8
Q

According to the income approach, if the capitalization rate increases, the property value

A

decreases.

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9
Q

Brokers and sales agents often use a simplified version of the sales comparison approach for residential real estate called a comparative

A

market analysis.

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10
Q

What is the primary difference between a price placed on a property by a real estate sales person and a value placed by a professional appraiser?

A

Real estate agent pricing is informal, while professional appraisers offer a formal or accurate number.

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11
Q

Honest and accurate valuations of property are now considered critical because

A

inflated appraisals are at least partially blamed for the real estate collapse of 2007 and the following recession.

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12
Q

Which of the following isNOTan appraisal license or certification level?

A

Certified special real estate appraiser

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13
Q

What exam must be passed by a board member of an appraisal management company?

A

No examination is required.

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14
Q

Must real estate appraisers, at any level, have real estate sales licenses as a prerequisite?

A

No, there are no real estate sales prerequisites.

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15
Q

Which of the following terms is best defined as analyzing the results obtained by the three approaches to value to determine a final opinion of value?

A

Reconciliation

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16
Q

Which approach involves a subject property and three or more comparable properties?

A

Sales comparison

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17
Q

In the sales comparison approach, the sales price of the comparable property is adjusted to account for physical conditions and

A

features.

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18
Q

When a sales agent prepares a brokers price opinion (BPO), what statement must be included?

A

That a BPO is not an appraisal

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19
Q

How much experience is required to become a state-licensed real estate appraiser?

A

No experience, only satisfactory passage of the state licensing exam

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20
Q

Which of the following dilemmas fits under the appraisal principle of contribution?

A

Should an owner install solar cells to reduce his electric bill, even though the payback is 20 years?

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21
Q

A purchaser wants a four-bedroom home with a large family room because he has three children and a large extended family that visits frequently. His ultimate selection of a home based on his basic needs and desires for particular bedroom and living spaces represents which characteristic of value?

A

Utility

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22
Q

Why are appraisal management companies (AMCs) needed?

A

To make sure appraisers are independent of lenders, thus reducing fraud.

23
Q

Who sets the listing price of a property?

A

The seller, based on what they feel the property is worth

24
Q

The stated purpose of the Texas Appraiser Licensing and Certification Board (TALCB) is to

A

protect consumers.

25
Q

Which person mayNOTconduct an appraisal for a residential property with an estimated value of $225,000 in a federally related transaction?

A

TREC-licensed real estate broker or sales agent

26
Q

Under what circumstances might a seller want an appraiser to place a value on the property?

A

If the seller feels the property is unique and should be priced differently from what is suggested by the comps

27
Q

Under Texas law, how soon must an appraiser be paid for his work?

A

Within 60 days

28
Q

What is the purpose of a Market Conditions Addendum?

A

To provide a clear and accurate understanding of market trends and conditions in the neighborhood

29
Q

The success of a retail store may attract investors to open similar retail stores in the area. Which basic principle of appraisal value does this illustrate?

A

Competition

30
Q

Which opinion of value or price are lenders, attorneys, and loss mitigation companiesMOSTlikely to accept?

A

Appraisals and broker price opinions

31
Q

What is a major flaw in comparative market analyses (CMAs) that real estate sales agents should discuss with their clients?

A

That CMAs typically include prices on homes that have not sold—many times because sellers were far too optimistic about the value of their property

32
Q

To arrive at a property’s value using the cost approach, calculate the value of the land

A

put to the highest and best use.

33
Q

How much continuing education is required for appraisers?

A

28 classroom hours, including 7 hours of theUSPAPupdate course

34
Q

Which economic principle states that there is one legal function that provides a property its greatest value?

A

Highest and best use

35
Q

If the value of a residential property increases because the zoning changed from residential to commercial, this is an example of the principle of

A

change.

36
Q

Which classification permits a person with no real estate appraisal experience to enter the real estate appraisal profession and work toward the requirements to become a licensed appraiser?

A

Approved appraiser trainee

37
Q

The final step in estimating property value using the income approach is to

A

apply the cap rate to property’s NOI.

38
Q

Step 1 in estimating property value using the income approach is to

A

estimate annual potential gross income.

39
Q

Who determines the listing price for a residential property?

A

Seller

40
Q

Which of the following isNOTa characteristic of an appraisal?

A

An appraisal determines the listing price of a property.

41
Q

Why do sales agents collect a fee for a broker price opinion, but not a comparative market analysis?

A

There is considerably more work involved in putting together a BPO.

42
Q

Appraisers are now obligated to report the presence of any environmental factors that could pose a risk to property values. What sort of environmental risks might be reported?

A

Proximity to a gas station (leaking underground storage tanks)
Land loss due to rising ocean levels (global climate change)
Proximity to oil fields where fracking may take place (potential ground movement)

43
Q

Which of the following is theMOSTcommon appraisal report used today?

A

Uniform Residential Appraisal Report (URAR)

44
Q

What license type applicant must take the 15-hourUSPAPcourse?

A

State-licensed appraiser
Certified residential appraiser
Certified general appraiser

45
Q

An ideal CMA would include the value of similar homes sold

A

in the last six months.

46
Q

The initialsAMCstand for what in real estate?

A

appraisal management company

47
Q

Under certain circumstances, appraisers may omit the step of going inside a property but may nevertheless submit an appraisal report. What is that appraisal called?

A

A drive-by appraisal

48
Q

Why should appraisers include such things as maps, photos, floor plans ,and other documents in their final report?

A

To offer as much documentation and clarification as possible about how the appraiser arrived at the value

49
Q

Which of the following statements isTRUE?

A

A comparative market analysis is a comparison of recently sold properties that are similar to a seller’s parcel of real estate.

50
Q

The four characteristics of value are demand, utility, scarcity, and

A

transferability.

51
Q

If a homeowner hopes to borrow money to do substantial improvements, what kind of information might an appraiser collect?

A

Values of other nearby homes with the same improvements as those being considered by the homeowner.

52
Q

Adding a second bedroom to a one-bedroom house substantially increases its value. Adding one bedroom to a five-bedroom house mayNOTincrease its value at all. This is an example of the principle of

A

increasing and diminishing return.

53
Q

A large, lavish house located in a neighborhood of much smaller, modest homes has less value than one in a development with other large, lavish homes. This is an example of the principle of

A

conformity.

modern real estate principles 2 (12 decks)

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