unit 3 property value and appraisal

Question 1

property taxes are based on market value

Answer 1

false

property taxes are based on assessed value

Question 2

it is the function of the appraiser to establish market price

Answer 2

false

it is the function of the appraiser to estimate market value

Question 3

physical, local, economic, and social are the four elements of value

Answer 3

false

the four elements of value are demand, utility, scarcity, and transferability (DUST)

Question 4

replacement cost is the present cost of replacing an improvement with another having the same utility

Answer 4

true

Question 5

a property with outdated electrical service and plumbing is suffering from physical depreciation

Answer 5

false

an example of functional obsolescence is an negative effect due to outdated plumbing. it is usually curable

Question 6

the principle of substitution underlies all approaches to value

Answer 6

true

Question 7

rotting wood is an example of functional obsolescence

Answer 7

false

rotting wood is an example of physical deterioration and depreciation

Question 8

a BPO completed by a salesperson or broker may be used for appraisal purposes

Answer 8

false

a BPO must clearly note that it is not an appraisal

Question 9

james built a $150,000 home in a neighborhood where the average price range is $60,000 - $75,000. james’s home value will suffer due to progression

Answer 9

false

regression is negative, whereas progression is a positive aspect

Question 10

capitalization is used to determine the value of unique properties

Answer 10

false

capitalization is used to determine the value of income-producing properties