Appraisal

Question 1

Market value is

Answer 1

Not cost, most probable price, market price

Question 2

Essential elements of value

Answer 2

Demand, utility, scarcity, transferability (DUST)

Question 3

Improved value of land

Answer 3

Land and improvements (fenced)

Question 4

Appraiser’s main concern

Answer 4

Marketability and acceptability

Question 5

Business cycle

Answer 5

Prosperity, expansion, recession, depression (PERD)

Question 6

Neighborhood cycle

Answer 6

Development, stability, decline, revitalization (DSDR)

Question 7

Ethical for appraiser to

Answer 7

Disclose interest

Question 8

Appraiser most interested in

Answer 8

Date price was agreed upon

Question 9

How long is Appraisal good for

Answer 9

Given date

Question 10

Unaccepted methods of appraisal is charged with

Answer 10

Felony

Question 11

Appraising single family residence is not which kind of value

Answer 11

Not assessed value

Question 12

License for strip mall

Answer 12

Certified general

Question 13

Narrative appraisal report

Answer 13

Not financing available, type of value, statement of purpose

Question 14

Fee appraiser

Answer 14

Self employed, charges a fee

Question 15

Appraisal objective

Answer 15

Support sales price, make loan, start on improved development

Question 16

What does an appraiser do After value indications

Answer 16

Reconcile all reports

Question 17

Why real estate has value

Answer 17

Maximum use of resources

Question 18

Increase in value may mean

Answer 18

Unearned increment population, over time appreciation

Question 19

Plottage is

Answer 19

Two or more units under common ownership

Question 20

Conformity is

Answer 20

Maintenance of value

Question 21

Examples of Principal of contribution (adds value)

Answer 21

Swimming pool, effect on net income

Question 22

Principal of regression

Answer 22

Nearby substandard property (something nearby that brings down the value)

Question 23

Sales price of comparable homes

Answer 23

Market data approach

Question 24

Similar and recent comps

Answer 24

Market data approach

Question 25

Principal of substitution is used in what approach

Answer 25

Market data approach

Question 26

Adjustments needed - no two properties identical

Answer 26

Market data approach

Question 27

Subtract features from comparables

Answer 27

Market data approach

Question 28

Hardest part in market data approach

Answer 28

Hardest part adjusting for differences

Question 29

Licensees use this approach for comps

Answer 29

Market data approach

Question 30

Limited in inactive market and rapidly changing economic conditions makes difficult of this approach

Answer 30

Market data approach

Question 31

Cost approach is used in what type of properties

Answer 31

Special purpose properties

Question 32

Cost approach is calculated by

Answer 32

Cost new, minus depreciation, plus land

Question 33

Upper limits of value is what type of approach

Answer 33

Cost approach (replacement)

Question 34

Replacement cost - same utility

Answer 34

Cost approach (replacement)

Question 35

Reproduction cost - exact replica

Answer 35

Cost approach (reproduction)

Question 36

1910 house - reproduction (over 100 years old, anything historic)

Answer 36

Cost approach (reproduction)

Question 37

Cost approach concepts

Answer 37

Quantity survey, square foot, unit in place

Question 38

Cost approach is better for

Answer 38

New home - not old

Question 39

Cost approach's least important concept

Answer 39

Not original cost to build

Question 40

Cost of smaller house - more per square foot

Answer 40

Cost approach concepts

Question 41

Explain Income approach (capitalization)

Answer 41

Converts income into value

Question 42

Best definition of income approach

Answer 42

Present worth of future benefits

Question 43

To arrive at effective gross income

Answer 43

Deduct for vacancy

Question 44

To arrive at annual net income

Answer 44

Deduct for management expenses

Question 45

Most difficult step of income approach

Answer 45

Select cap rate

Question 46

Depreciation means

Answer 46

Loss in value from any cause

Question 47

Depreciation causes:

Answer 47

Physical (wear and tear), Functional Expenses

Question 48

Obsolescence means

Answer 48

Impairment of desirability (ex. no parking), Not wear and tear

Question 49

Functional obsolescence means

Answer 49

Within property lines

Question 50

Example of functional obsolescence

Answer 50

Two houses, same costs, different values

Question 51

Economic obsolescence

Answer 51

Outside property lines, Not outdated kitchen, most difficult to cure

Question 52

Economic life for a building means

Answer 52

Building earns sufficient income

Question 53

Effective age on a house

Answer 53

15 year old house appears to be only 6 years

Question 54

How do you calculate Gross Rent Multiplier (GRM)

Answer 54

Sales price divided gross monthly rent, $308,736

Question 55

Bureau of Real estate appraisers issues and does what

Answer 55

Issues licenses, investigates complaints

Question 56

Analysis of fact is

Answer 56

Appraisal value

Question 57

What presents worth

Answer 57

Appraisal value

Question 58

Ability of one commodity is

Answer 58

Appraisal value

Question 59

Desirous person is

Answer 59

Appraisal value

Question 60

What value is Not a fact

Answer 60

Appraisal value

Question 61

First step for vacant land

Answer 61

Highest and best use for appraisal

Question 62

Deduct demolition

Answer 62

Highest and best use for appraisal

Question 63

Greatest net return

Answer 63

Highest and best use for appraisal

Question 64

Site analysis

Answer 64

Highest and best use for appraisal

Question 65

Interim use

Answer 65

Highest and best use for appraisal

Question 66

No prudent person

Answer 66

Principal of substitution

Question 67

Use, design, income

Answer 67

Principal of substitution

Question 68

Lowest price preferred

Answer 68

Principal of substitution