Appraisal 1

Question 1

Property valuation or land valuation is the process of developing an opinion of value is a(n)________
A: Appraisal
B: Demand
C: Supply
D: None Of The Above

Answer 1

A: Appraisal

Question 2

_______ is the amount for which something can be sold on a given market
A: Property Value
B: Principle Value
C: Market Value
D: None Of The Above

Answer 2

C: Market Value

Question 3

Definition of Appraisal

Answer 3

1. Impartial analysis and evaluation conducted according to established criteria to determine the acceptability, merit, or worth of an item.
2. Evaluation by a qualified appraiser to (1) assess the current market value of a property, (2) estimate the extent of damage to an insured property
   and cost of repairs, or (3) determine if a total loss occurred. A written appraisal is usually a key requirement when a property is bought, sold, insured, or mortgaged. It is required also when a claim is filed for compensation for damage or destruction of the insured property.
3. Alternative term for valuation.

Question 4

What is required to obtain an Appraiser’s license? These are the requirements:

Answer 4

• In order to become a certified residential appraiser, you will need the following: A bachelor’s degree. At least 200 hours of AQB-approved appraisal coursework.

Question 5

What is USPAP?

Answer 5

• In 1989, the Uniform Standards of Professional Appraisal Practice (USPAP) was authorized by Congress as the minimum performance standards for appraisal practice in the United States of America. Published by The Appraisal Foundation, USPAP is recognized as the source for standards for professional appraisal practice in the United States and many other parts of the world. The main purposes of USPAP are to protect the public and to promote public trust in the appraisal profession.
• USPAP contains both rules and standards pertaining to: (1) development of an appraisal; and (2) the reporting of that value opinion to the client. USPAP provides details on what an appraiser must consider in order to be independent, impartial and objective and to arrive at a credible opinion of value. It does not dictate specific methodologies or approaches that are to be employed in order to arrive at a conclusion. For a complete understanding, the official USPAP document can be viewed at www.appraisalfoundation.org.

Question 6

Value

Answer 6

• Property valuation
• land valuation is the process of developing an understanding of value

Question 7

What is Market Value

Answer 7

The amount for which something can be sold on a given market

Question 8

Supply

Answer 8

“The total amount of a good or service available for purchase; along with demand, one of the two key determinants of price”.

Question 9

Demand

Answer 9

Definition The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. Along with supply, demand is one of the two key determinants of the market price.

Question 10

The acronym AMC stands for:
A: Appraisal Management Company
B: Assets Merging Company
C: Arrangement Management Company
D: None Of The Above

Answer 10

A: Appraisal Management Company

Question 11

The Nature of Value = DUST

Answer 11

• Demand
• Utility or usefulness
• Scarcity
• Transferability

Question 12

The Essential Parts of an Appraisal

Answer 12

• Date
  *Property Description
• Estimate of value
  *Signature

Question 13

Substitution

Answer 13

Definition An appraisal principle that states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no costly delay is encountered in making the substitution.

Question 14

The Appraisal Process

Answer 14

1) Define the problem
2) Conduct survey
3) Gather data
4) Classify data
5 Reconcile data
6) Issue Report

Question 15

Conformity

Answer 15

The appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value. In general, conformity assumes that a neighborhood that is reasonably similar in social and economic activity will result in properties that
reach their maximum value.

Question 16

Progression

Answer 16

A smaller home next to a larger one increases the value of the smaller home.

Question 17

Regression

Answer 17

A larger home in a neighborhood with smaller
homes decreases in value.

Question 18

Contribution

Answer 18

• An improvement must contribute its cost to the value of
  the property.
• Examples:
• Swimming pools
• New kitchen
• Landscaping
• New bathrooms

Question 19

Principle of Change

Answer 19

The principle of change realizes the economic and social factors that might affect value of the property

Question 20

Anticipation

Answer 20

Principle of anticipation refers to a rule on which the current value of a property depends. According to this principle the value of the property depends on the anticipated utility or income that will accrue to the property owner in the future

Question 21

Competition

Answer 21

the competition principal is in regards the value of a property compared to another very similar property

Question 22

Outlier

Answer 22

Outlier: That ultra high price, far more than the other willing home buyers were offering to pay.

Question 23

Situs

Answer 23

Definition The economic attributes of a location, including the relationship between the property and surrounding properties. Situs is the aspect of location that contributes to a property’s market value.

Question 24

What is an Plottage?

Answer 24

• Plottage is the increase in value realized by combining adjacent parcels of land into one larger parcel. The process of combining the parcels is known as assemblage. Generally, the value of the whole
  parcel will be greater than the sum of the individual smaller parcels.

Question 25

Appraisal

Answer 25

* An appraisal can help you understand and decide what and how to renovate the property *Appraisers will use standard forms to complete the appraisal process for each property There are several components that are considered when conducting an appraisal process. Lets discuss a few of them: * The Neighborhood * The condition of the home * Trends within the area * The foundation of the home * Comparable sales * Exterior material of the home A appraisal is NOT the same thing as an inspection A home inspection is a detailed report of the home's condition Remember, an appraiser will be looking at your neighborhood and comparable sales when conducting an appraisal * There are several factors that can drive the value of the home up or down. *The main focus of an appraisal is ALL about a home's current condition

Question 26

Another word for "area preference" is A: Progression B: Conformity C: Situs D: Outlier

Answer 26

C: Situs

Question 27

A subdivision of "cookie-cutter" identical homes is an example of A: Progression B: Conformity C: Situs D: Regression

Answer 27

B: Conformity

Question 28

When a smaller home in a neighborhood with larger homes increases in value, this is an example of the principle of A: Progression B: Conformity C: Highest And Best Use D: Regression

Answer 28

A: Progression

Question 29

A brand new kitchen that significantly enhances the value of the property and more than makes up for the actual cost of the improvement would be an example of: A: Situs B: Regression C: Contribution D: All Of The Above

Answer 29

C: Contribution

Question 30

The basic principles of value do NOT include A: Demand B: Utility C: Scarcity D: Depreciation

Answer 30

D: Depreciation

Question 31

The two charateristics that govern the way the market reacts to supply and demand are: A: Uniqueness And Immobility B: Governmental Controls And Monetary Policy C: Population Demographics D: Price And Demographics

Answer 31

A: Uniqueness And Immobility

Question 32

USPAP stands for A: Uniform Standards Of Professional Appraisal Practice B: Uniform Standards Of Practiced Appraisers Performances C: Uniform Supported Professional Appraisal Practices D: Utah Supported Professional Appraisal Practices

Answer 32

A: Uniform Standards Of Professional Appraisal Practice

Question 33

Essential components of an appraisal include: A: Date B: Property Description C: Estimate Of Value D: All Of The Above

Answer 33

D: All Of The Above

Question 34

Forces that influence value include: A: Physical B: Economic C: Political D: All Of The Above

Answer 34

D: All Of The Above

Question 35

The price a willing and able buyer is willing to pay and a willing and able seller is willing to accept is called: A: Market Value B: Market Price C: Appraised Value D: Assessed Value

Answer 35

A: Market Value