Ch 4

Question 1

Assignment Conditions:

Answer 1

Assignment Conditions: assumptions, extraordinary assumptions, hypothetical conditions, laws and regulations, jurisdictional exceptions, and other conditions that affect the scope of work.

Question 2

Standards Rule 2-2 (a) lists the ___ ___ for a Appraisal Report. Standards Rule 2-2 (b) lists the ___ ___ for a Restricted Appraisal Report.

Answer 2

Standards Rule 2-2 (a) lists the fourteen requirements for a Appraisal Report. Standards Rule 2-2 (b) lists the sixteen requirements for a Restricted Appraisal Report.

Question 3

In residential appraisal practice today, the most commonly-used real property appraisal report form is the Uniform Residential Appraisal Report, also known variously as the ___, Fannie Mae Form ___, or Freddie Mac Form ___. It is the type of appraisal report that the ___ of mortgage lending clients request.

Answer 3

In residential appraisal practice today, the most commonly-used real property appraisal report form is the Uniform Residential Appraisal Report, also known variously as the URAR, Fannie Mae Form 1004, or Freddie Mac Form 70. It is the type of appraisal report that the majority of mortgage lending clients request.

Question 4

The URAR form is to be used to report appraisals of ___ homes, ___ with __ ___ ___, or individual units in a ___ ___ ___. This form will be used for the appraisal of ___ homes, ___ homes (both open panel and closed panel), and ___ homes. For Fannie Mae and Freddie Mac purposes, this report form is not to be used to report the appraisal of 2-4 unit properties, condominium units or ___ units, or ___-code ___ homes.

Answer 4

The URAR form is to be used to report appraisals of single-family homes, single-family homes with an accessory unit, or individual units in a planned unit development. This form will be used for the appraisal of modular homes, panelized homes (both open panel and closed panel), and kit homes. For Fannie Mae and Freddie Mac purposes, this report form is not to be used to report the appraisal of 2-4 unit properties, condominium units or cooperative units, or HUD-code manufactured homes.

Question 5

Let’s say that 15 houses in the neighborhood were sold and closed in a 12-month period. The absorption rate per month is:

Answer 5

Absorption Rate Calculation:

# of closed sales in the period (15)
  # of months in the period (12)

15 divided by 12 = 1.25 absorption rate per month

Question 6

Now let’s assume that six houses are currently for sale in the neighborhood. How long will it take to sell this inventory if the absorption rate is 1.25?

Answer 6

Absorption Period Calculation (Unsold Inventory Index):

# of properties for sale (6)
   Absorption Rate (1.25)

6 divided by 1.25 = 4.8 months to absorb or sell the existing inventory

Question 7

Expiration Ratio Calculation:

1. # of months in the calculation period (12)
2. # of closed sales in the calculation period (15)
3. # of expired offerings in the calculation period (9)

Answer 7

Expiration Ratio Calculation:

4. Add lines 2 & 3 = 24 (15 + 9)
5. Divide line 3 by line 4 = 9/24 = 0.375 or 37.5% Expiration Ratio

Question 8

Name PUBLIC UTILITIES:

PRIVATE UTILITIES:

Answer 8

PUBLIC UTILITIES: PRIVATE UTILITIES:
Electric Utility Generator Electric
Gas Utility Propane Gas
Water Utility Well Water
Sewer Utility Septic System

Question 9

Special Flood Hazard Areas, assigned by FEMA, are noted to be areas with “” and “” designations. Other areas, which are not special flood hazard areas, include “”, “”, and “_.”

Answer 9

Special Flood Hazard Areas, assigned by FEMA, are noted to be areas with “A” and “V” designations. Other areas, which are not special flood hazard areas, include “B”, “C”, and “X.”

Question 10

Some examples of commonly found external obsolescence are:

Answer 10

property fronts a noisy and/or busy street
property backs to a commercial property
property is across the street from a commercial outlet
property is near the railroad tracks
property is in or near the flight path of an airport

Question 11

A sale is considered to have taken place if

Answer 11

A sale is considered to have taken place if a change of ownership or change of title has occurred.

Question 12

Sources for Sales history analysis:

Answer 12

Assessor records
Multiple listing service
Listing agent or selling agent
Owner
Recorder of deeds
HUD-1/Closing statements

Question 13

You are required to document and analyze the subject’s ___ ___ for ___ ___ prior to the ___ date of the appraisal. That is a USPAP requirement and it is the ___ time requirement.

Answer 13

You are required to document and analyze the subject’s sales history for three years prior to the effective date of the appraisal. That is a USPAP requirement and it is the minimum time requirement.

Question 14

The sales used in the Sales Comparison analysis are to be researched for a minimum of ___ ___ prior to the date of the ___ ___ date. This is not a ___ requirement; rather it is a ___ / ___ requirement.

Answer 14

The sales used in the Sales Comparison analysis are to be researched for a minimum of one year prior to the date of the comparable sale date. This is not a USPAP requirement; rather it is a Fannie Mae/Freddie Mac requirement.

Question 15

The Cost and Income Approaches are not required by ___ or ___.

Answer 15

The Cost and Income Approaches are not required by Fannie Mae or Freddie Mac.

Question 16

if you develop the Cost and/or Income Approach(es), you

Answer 16

if you develop the approach(es), you must acknowledge and report it/them.