CHAPTER THREE QUIZ Flashcards
What does the acronym DUST stand for?
Demand, utility, scarcity, transferability
Before determining the sales price, you should take what final step?
Do a walk-through of the property to get an idea of the overall condition.
Which of the following properties may be used as a comparable property in a CMA?
A similar, recently sold property in the neighborhood
If the subject property is inferior in one component relative to the comparable property, a ………adjustment should be made.
negative
The reconciled price is equal to the ………… of the indicated values.
average
When conducting a CMA, the listing price is typically based on which of the following?
Reconciled price
A comparative market analysis is typically performed by which of the following parties?
Listing broker
Which is true of the sales comparison appraisal method?
It’s generally the most useful method for single families homes.
Which is true of the income appraisal method?
To determine value, the appraiser needs to know the net operating income and the capitalization rate
What is the purpose of an appraisal?
To arrive at a market value of a given property.
Is data from recent sales enough to establish value?
No, combining recent sales only gives you an estimate.
What happens to property values if lenders freeze lending?
Property values drop because of a lack of capital.
What happens when interest rates increase?
Fewer people are eligible for mortgages and property values decrease.
A playground is being built in a neighborhood with primarily senior housing. Is this good for property values?
No, because it lacks utility.
This principle affirms the value is created by anticipated benefits to be derived in the future…?
Principle of anticipation
Do higher property taxes impact home values?
Yes, the properties will be less valuable.
What is the principle of change?
Changing market conditions such as supply and demand, interest rates, and property conditions.
What is highest and best use?
When a property is used in the manner it is best suited for.
There are 100 three-bedroom homes available, and there are 200 buyers, what happens to the property value?
The property values increase because of high demand.
A town has decided to build a school and a playground in a neighborhood. Property values are increasing. Why does this occur?
In anticipation of the school and playground, more families are interested in homes.
What occurs when a subdivision built 10 years ago suddenly has a brand new home added?
The newer home will have a lower value because the other homes are not as new or modern.
If all the homes sold recently have finished basements and the appraised property has an unfinished basement, what happens?
The appraiser takes the cost of finishing and deducts from the value.
Does a brand new roof make a property more valuable?
Yes, the new roof should increase the value.
The seller has a ranch home. There are three ranch homes and three Tudors that have sold in the last six months. What should the appraiser do?
AUsing the ranch homes is how he would do the comparison.
