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Utah Real Estate > Valuation and Appraisal > Flashcards

Valuation and Appraisal Flashcards

1
Q

The four parts of an appraisal are:

A

Date
Description of the property
Estimate of value,
Signature of the appraiser

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2
Q

The nature of value incorporates the acronym DUST. The letters stand for:

A

Demand
Utility
Scarcity
Transferability

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3
Q

T/F. The appraiser uses the information accumulated to find an “average” value.

A

False

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4
Q

Which appraisal report has the most comprehensive records and backup information included (such as maps, photographs, etc.)?

A

Narrative

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5
Q

Which appraisal report is less formal, with a simple statement of value, usually less than a page long?

A

Letter

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6
Q

Which appraisal report is in the form of a “checklist” and most often used for institutional lenders?

A

Short

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7
Q

Of value in use and value in exchange, which is subjective?

A

Use

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8
Q

A neighborhood where all homes are similar in design and value illustrates the principle of:

A

Conformity

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9
Q

If most homes are approximately $60,000 in value and one is $100,000, the $100,000 home is an example of the principle of:

A

Regression

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10
Q

In an area of $100,000 homes, the $90,000 home is an example of:

A

Progression

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11
Q

Amenities are:

A

Pleasure items

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12
Q

A view would be considered a:

A

Intangible Amenity

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13
Q

A hot tub would be a:

A

Tangible Amenity

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14
Q

Define Assemblage

A

Joining two or more contiguous parcels of land together.

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15
Q

If putting two or more contiguous parcels of land together increases the value, that is:

A

Plottage

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16
Q

Which of these qualify as a “service” property?

a. Church
b. Home
c. Vacant lot

A

A. Church

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17
Q

The shared or common wall between two twin homes is called a _____ ____.

A

Party Wall

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18
Q

Name the 3 appraisal approaches:

A

Market Data (Comparison)
Cost Replacement
Income

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19
Q

Which is most expensive?

a. Cost Reproduction
b. Cost Replacement

A

a.Cost Reproduction

20
Q

T/F The total square feet in a home is measured by inside dimensions.

A

False

21
Q

The Gross Rent Multiplier (GRM) is found by dividing the purchase price by the gross rents.

A

True

22
Q

The boundary of the lot that runs parallel to the street is called?

A

Front feet

23
Q

How close to the street are you allowed to construct a building is referred to as the ___ ____ ____.

A

Set back line

24
Q

Which is considered by the appraiser to be longer:

a. Economic life
b. Physical life
c. Appraised life
d. Amortized life

A

b. Physical Life

25
Q

The last step (before the report) in the appraisal process is to _________ ___ _____.

A

Reconcile the data

26
Q

What you paid for the property is the:

a. Price
b. Cost

A

Cost

27
Q
  1. What you sell it for is the:
    a. Price
    b. Cost
A

Price

28
Q

The first principle of appraising is:

A

Highest and Best Use

29
Q

To determine highest and best use, the appraiser asks:

A

Is it legal?
Is it economically feasible?
What will bring the highest return now and in the future?

30
Q

The appraisal principle that states: “No prudent buyer will pay more than he has to in order to get what he wants,” is:

A

Substitution

31
Q

“An improvement must add its cost to the value of the property,” is the principal of:

A

Contribution

32
Q

The opposite of plottage is:

A

Subdivision

33
Q

A five-bedroom home with one bathroom is an example of _______________ obsolescence.

A

Functional

34
Q

A home in an area where property taxes have been markedly increased is an example of external, obsolescence or

A

Economic

35
Q

T/F. To qualify as a “service” property, it must be used by the public and also be non-profit.

A

True

36
Q

T/F. To appraise a church, the most effective approach would be the cost approach

A

True.

37
Q

The only approach that gives a separate value on the land is the _______________ approach.

A

Cost

38
Q

What appraisal method would be used for a warehouse?

A

The cubic foot

39
Q

The formula which takes several comparable properties and makes adjustments to make them look as much as possible like the subject property is the __________ ______ Approach, also known as Comparison Approach.

A

Market Data

40
Q

To determine value using the capitalization approach, the NOI (net operating income) is divided by the ____ ____

A

Sale Price

41
Q

T/F The higher the cap rate the lower the risk.

A

False

42
Q

The higher the cap rate the lower the purchased cost.

A

True

43
Q

The property being appraised is called the _________________ property.

A

Subject

44
Q

A “quick and dirty” estimate, or “rule of thumb” for arriving at a value for investment property is the:

A

Gross Rent Multiplier

45
Q

Gross Rent Multiplier Formula:

A

Sale Price/Annual Gross Rent

Utah Real Estate (9 decks)

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