Basic Real Estate Appraisal

Question 1

Presence of pollutant in the area

Answer 1

Environmental factors

Question 2

Demand for an aging population.

Answer 2

Social factors

Question 3

Value to a specific investor with a specific plan for the property.

Answer 3

Investment value

Question 4

Value used on property for tax purposes.

Answer 4

Assessed value

Question 5

All property value is created by the of the future benefits the property will provide.

Answer 5

Anticipation

Question 6

The idea that nothing remains the same.

Answer 6

change

Question 7

If that building is a success other builders are likely to follow with more office buildings until the last office building a builder erects remains partially vacant because the suppliers have created a surplus of office space.

Answer 7

Competition

Question 8

The whole is sometimes greater than the sum of its parts.

Answer 8

Plottage

Question 9

That a buyer will try to pay as little as possible for the property that meets the buyer’s needs.

Answer 9

Substitution

Question 10

Outmoded design in older structures or unacceptable design in newer structures usually points to a type of depreciation.

Answer 10

Functional obsolescence

Question 11

Estimating depreciation is a way to calculate depreciation caused by wear and tear on the structure that presumes that structures wear at the same rate each year.

Answer 11

Straight line method

Question 12

Analyzes the future financial benefits of a piece of real estate and converts it into an estimate of present value.

Answer 12

Income approach

Question 13

The income that the building generates when rented at 100 percent occupancy.

Answer 13

Potential gross income.

Question 14

The result of subtracting the vacancy and collection loss from potential gross income.

Answer 14

Effective gross income

Question 15

The process of analyzing and weighing the results of the various approaches as applied to an appraisal problem.

Answer 15

Reconciliation

Question 16

Valuation approach use in the single family homes.

Answer 16

Sales comparison approach

Question 17

Value of superior property is adversely affected by the value of inferior property.

Answer 17

Regression

Question 18

The key criterion in the valuation of real property or personal property.

Answer 18

UTILITY

Question 19

Cost to create a virtual replica of the existing structure.

Answer 19

REPRODUCTION

Question 20

Cost of constructing a structure with comparable utility.

Answer 20

REPLACEMENT

Question 21

Very open and most transparent method of selling property.

Answer 21

Auction sale

Question 22

The seller is under financial or other pressure to sell quickly.

Answer 22

Forced Sale

Question 23

The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

Answer 23

FAIR VALUE

Question 24

An amount above the Market Value that reflects particular attributes of an asset that are only of value to a Special Purchaser.

Answer 24

SPECIAL VALUE

Question 25

Additional element of value created by the combination of two or more interests where the value of the combined interest is worth more than the sum of the original interests.

Answer 25

Synergistic value

Question 26

Describes a situation where an entire business is transferred as an operational entity.

Answer 26

Going concern value

Question 27

The present value of the future cash flows expected to be derived from an asset or cash- generating unit.

Answer 27

VALUE IN USE

Question 28

In the absence of sufficient direct market evidence, acceptable method of arriving value of specialized property.

Answer 28

DRC

Question 29

Resulting from external influences may affect the value of the asset.

Answer 29

Obsolescence

Question 30

Individual properties, such as hotels, fuel stations, and restaurants that usually change hands in the marketplace while remaining operational.

Answer 30

Trade Related Property

Question 31

The process of analyzing sets of property and market data to determine the specific parameters operating upon a model.

Answer 31

CALIBRATION

Question 32

Applies the basic economic principle that a buyer will pay no more for an asset than the cost to obtain an asset of equal utility, whether by purchase or by construction.

Answer 32

Cost approach

Question 33

Refers to a price expressed in terms of money payable for the asset in an arm’s length market transaction.

Answer 33

Estimated amount

Question 34

Establishes that each party is motivated to undertake the transaction, but neither is forced or unduly coerced to complete it.

Answer 34

Without compulsion

Question 35

Method of land valuation in the absence of vacant land sales, whereby improvement values obtained from the cost model are subtracted from sales prices of improved parcels to yield residual land value estimates.

Answer 35

Abstraction method

Question 36

The distribution of the appraised value of the property between land and building.

Answer 36

ALLOCATION

Question 37

The period of time over which the structure may reasonably be expected to perform the function for which it was designed or intended.

Answer 37

USEFUL LIFE

Question 38

Conditions and assumptions under which appraisal is made.

Answer 38

Limiting condition

Question 39

Statement that appraisers, in their professional capacity, personally conducted the appraisal in an objective manner.

Answer 39

Certification of value

Question 40

Risk due to uncertainty in rent, vacancies and operating expenses.

Answer 40

Business risk

Question 41

Risk due to uncertainty in future interest.

Answer 41

Interest risk

Question 42

Land that has been improved for specific purpose.

Answer 42

SITE

Question 43

Prepared the first documented valuation manual in Ireland.

Answer 43

Sir William Petty

Question 44

Identify the market supply and demand of a particular product

Answer 44

MARKET ANALYSIS

Question 45

It assumed that deterioration and wear occur at a constant average annual rate

Answer 45

Straight line depreciation

Question 46

Poor layout is an example of .

Answer 46

Functional obsolescence