Valuation Process

Question 1

T/F There is one universal definition of market value used in real prop. Appraisal?

Answer 1

False

Question 2

Steps in the Valuation Process

Answer 2

1.Define the problem
2.Determine scope of work
3.Gather, record, verify data
4.Determine highest and best use
5.Estimate land value
6.Estimate value by 3 approaches
7.Reconcile estimated values into final opinion
8.Report final opinion

Question 3

Step 1 in Valuation Process

Answer 3

Define the problem

Question 4

Step by step procedure that can be applied to any type of appraisel assignment

Answer 4

Valuation Process

Question 5

An interest or interests in real estate is the definition of

Answer 5

Real Property

Question 6

T/F Effective date of the valuation must be the date on which the appraiser inspected subject property

Answer 6

False. Can be past, present, or future date.

Question 7

An appraisel report must specify date of_________ and date of __________

Answer 7

Appraisel and report. Two dates necessary

Question 8

Who is responsible for identifying the intended use of an appraisel?

Answer 8

Appraiser

Question 9

Final step in valuation Process?

Answer 9

Report final opinion of value

Question 10

Identify, from sources reasonably reliable, characteristics of the prop. that are relevant to the type and def. of value & use of appraiseal including its location & physical legal and economic characteristics

Answer 10

Standards Rule 1-2 (e)

Question 11

Most common usage for prospective value opinions?

Answer 11

Proposed improvement or development

Question 12

Most common type of value sought by appraisers?

Answer 12

Market Value

Question 13

Type of value stated as an opinion, that presumes transfer of prop., as of a certain date, under specific conditions, identified by appraiser as applicable.

Answer 13

Market Value

Question 14

Identify type and definition of value, if to be market value, ascertain whether it is to be most probable price
(i) in terms of cash
(ii) financial arrangements equivalent to cash
(iii) in other precisely defined terms
(iv)if opinion is based on non market financing

Answer 14

Standards Rule 1-2 (c)

Question 15

Purpose of an Assignement

Answer 15

To develop an opinion of the defined value of a specified interest in real estate

Question 16

The use of an appraisers reported appraisal, as identified by appraiser based on communication with client

Answer 16

Intended Use

Question 17

The client and any other part as identified as users of the appraisal

Answer 17

Intended User

Question 18

Identify the client and other users

Answer 18

Standards Rule 1-2(a)

Question 19

Identify the effective date of the appraisers opinions and conclusions

Answer 19

Standards Rule 1-2 (d)

Question 20

An assignment specific assumption, as pf the effective date, which if found to be false, could alter the appraisers conclusions

Answer 20

Extraordinary Assumption

Question 21

USPAP requires ______________ disclosure of hypothetical conditions

Answer 21

Clear and conspicuous

Question 22

Appraisel term defined as: Condition directly related to specific assignnment, which is contrary to what is known by the appraiser to exist, but used for the purpose of analysis

Answer 22

Hypothetical Condition

Question 23

Accomplishing the first 4 action steps provides basis for deciding which of property’s characteristics are relevant for the assignment

Answer 23

AO (advisory opinion) 22

Question 24

Assignment conditions

Answer 24

Assumptions, extraordinary assumptions, hypothetical conditions. Laws and reg’s, and other conditions which affect scope of work

Question 25

Step 2 in the Valuation Process

Answer 25

Scope of Work

Question 26

The type and extent of research and anylses in an appraisel or appraisel review assignment

Answer 26

Scope of Work

Question 27

Understanding which analysis, methods and techniques are necessary and what data to correctly complete the analyses

Answer 27

AO-22

Question 28

Determine the scope of work necessary to produce credible results in accordance with this rule

Answer 28

Scope of Work Rule, Standards Rule 1-2(h)

Question 29

1 Identify problem to be solved 2 determine and prefrontal scope of work necessary 3 disclose scope of work in report

Answer 29

Scope of Work Rule

Question 30

Summarize scope of work used to develop the appraisel (includes disclosure of research and analysis preformed or not preformed)

Answer 30

Standard Rule 2-2 (a) (viii)

Question 31

Data, info., and documentation necessary to supports appraiser's opinions and conclusions and show compliance with USPAP

Answer 31

Workfile

Question 32

Gather, record. And verify Data

Answer 32

Step 3 of Valuation Process

Question 33

In valuation practice, the process of validating or establishing the truth about info. From another source

Answer 33

Verify

Question 34

Appraiser must verify sale info. with __________,___________, or ____________

Answer 34

Buyer, seller, or one of their representatives or clearly state how the sale was verified and to what extent.

Question 35

T/F According to Fannie Mae, use of sales data-particularly comp. sales data- provided by parties who have financial interest in the sale w/o appraisers verification of info. from disinterested source is acceptable.

Answer 35

False, acceptable to use, but only if verified by disinterested party

Question 36

Determining highest and best use

Answer 36

1. Legally permissible 2.physically possible 3. Financially feasible 4. Maximally productive

Question 37

Step 5 in Valuation Process

Answer 37

Estimate the land Value

Question 38

Step 4 in Valuation

Answer 38

Determine Highest and Best Use

Question 39

Step 6 in Valuation

Answer 39

Estimate Value by any applicable approach. Cost, Sales Comparison, or Income Capitalization

Question 40

Step 7 in Valuation

Answer 40

Reconcile Estimated Value. Come to one reasoned opinion as to value, as of effective date.

Question 41

Final Step in Valuation

Answer 41

Report Final Opinion of Value. Standard 2 USPAP.

Question 42

Appraiser must be prepared to demonstrate that scope of work is sufficient to produce

Answer 42

Credible assignment results

Question 43

An appraisal report must contain sufficient info. to allow __________ to understand the scope of work.

Answer 43

Intended user

Question 44

According to USPAP, the credibility of assignment results is measured ___________

Question 45

Effective date of value can be

Question 46

Which is not an appraisers source for a legal description?

Answer 46

Postal address

Question 47

Scope of Work applies to

Answer 47

Both appraisels and review assignments

Question 48

An appraiser must comply with the SCOPE OF WORK RUKE when completing

Answer 48

An appraisel assignment only