Day 1 Flashcards
(155 cards)
1
Q
appraiser
A
expected to perform valuation services
2
Q
appraisal
A
opinion of value
3
Q
Appraisal process-4 points
A
- written or oral opinion of value
- can be specific $ amount, range, or relationship
- does not establish value.
- Real, personal, intangible property
4
Q
appraisal valuation service
A
- appraisal
- appraisal review (judging quality of another appraisers work)
5
Q
why are appraisals done
A
- transfers
- financing
- litigation
- tax matters
- investment decisions
6
Q
Real estate
A
land+improvements (appurtenances)
7
Q
Real property
A
Real estate including fixtures+interests, rights, and benefits
8
Q
Bundle of Rights (SLUGER)
A
SLUGER
- Sell
- lease
- use
- give away
- enter or leave
- refuse to do any
9
Q
Fixture
A
once personal property that has been installed and is now part of real property, meant to enhance property
10
Q
Trade Fixtures
A
for the business, not to enhance real property, still considered personal property
11
Q
Ag crops which require cultivation are _____ property
A
personal. known as implements. Naturally growing are real.
12
Q
Intangible personal property
A
evidence of ownership of property rights
- patents
- copyrights
- stocks
- exempt in colorado
13
Q
Business, going concern
A
intangible, assumption that business will remain in operation and profitable.
- Franchises
- trademarks
- patents/copyrights/etc
14
Q
Land
A
- earths surface
- land and water
- attachments by nature or human hand
- all natural resources in original state
15
Q
land is ___ and ____
A
immobile, durable
-each parcel is unique in location and composition
16
Q
sq ft in an acre
A
43560
17
Q
acres in a section
A
640
18
Q
improvements
A
buildings, support structures (porches, barns, IG pools,
-immovable and permanently affixed
19
Q
land description methods
A
- metes and bounds
- government rectangular survey
- lot, block, tract
20
Q
metes and bounds
A
metes-measurements of length
bounds are boundaries in relation to a marker
-earliest form, still primary for 21 states, used for odd shaped parcels
21
Q
governmental survey rectangular
A
checkerboard, baseline (E-W), meridian (N-S)
22
Q
sq miles in township
A
36 (sections)
23
Q
lots and blocks
A
subdivide a parcel of land
24
Q
Private First Class Makes Low Pay
A
Private First Class Makes Low Pay Property Rights Financing Conditions of sale Market Conditions Location Physical Characteristics
25
ownership in severalty
no restrictions, owned by one entity, could be business (corporation, REIT, syndication)
26
co-ownership types
tenancy in common, joint tenancy, tenancy by entirety, community property
27
tenancy in common
specified undivided interest, no right of survivorship, default
28
joint tenancy
equal shares, right of survivor-ship, must be declared
29
assemblage
combining 2 or more parcels, under one ownership/use, may or may not be contiguous
30
plottage
increased value from assemblage
31
governmental limitations (PETE)
Police power
Eminent domain
Taxation
Escheat
32
escheat
property reverting to state when owner dies intestate
33
1 mill
.001
34
CO assessment percentages
Res
producing oil and gas
all other property
Res-7.96%
oil and gas- 87.5%
all other- 29%
35
effective tax rate
tax bill/property value
36
Private Limitations - DEALLER
```
Deed Restrictions
Easement
Adverse Possession
Lease
Liens
Encroachment
Reservation
```
37
adverse possession
continuous possession with eventual claim of title
38
eminent domain
take private property for public use through condemnation process
39
Taxation
tax real property for government services
40
deed restriction
passes to new owner, restricts use
41
lien
legal claim on property to satisfy a debt owed
42
reservation
some rights stay with grantor
43
estate in real property
degree, quantity, nature, and extent of interest
44
fee simple defeasible
void upon event occurance
45
leased fee
lessor/owner leased fee interest
46
life estate
use occupy control, limited to lifetime of life tenant
47
estate at will
can be terminated by one or both parties
48
general warranty deed
The General Warranty Deed conveys the most
| secure title that can be received.
49
quitclaim deed
Quitclaim deeds contain the operative words "sell and quitclaim," showing the intent to pass title and deliver possession. Quitclaims only transfer the grantor's
"present interest" in land, if any. Quitclaim deeds contain no warranties. Typically a quitclaim deed is used to clear up technical defects in chain of title or remove a cloud on the title. Examples: misspelled name, wrong initial,
and/ortypographical errors in legal description.
50
```
The deed provides the greatest amount of warranty.
A. Quitclaim.
B. General warranty.
C. Special warranty.
D. Bargain and sale.
```
B. General Warranty
51
```
The basic 'bundle of rights' inherent with the ownership of real estate includes all of the
following except the right to:
A. Adverse possession.
B. Sell.
C. Lease / rent.
D. Enter or leave.
```
A. Adverse Possession
52
Government limitations to the 'bundle of rights' include:
A. Death with a will, property tax, easement violations.
B. Real property taxation, police power, easements, and estate liens.
C. Mortgages, liens, foreclosure, encroachments.
D. Police power, eminent domain, real property taxation, and escheat.
D.
53
```
4. The deed that conveys the least secure title that can be received is the:
A. Special warranty deed.
B. Bargain and sale deed.
C. General warranty deed.
D. Quitclaim deed.
```
D
54
```
A property is leased to Jim Smyth. Which term describes Mr. Smyth’s interest in the
property?
A. Fee simple.
B. Life estate.
C. Leasehold.
D. Leased fee.
```
C
55
Mr. Ibrahimovic received a tax bill for $1,888.60 on his primary residence. The total
mill levy in his tax area is 89.38. What is the value of his property?
265,452
56
```
7. What is the government process to acquire land for public benefit?
A. Condemnation.
B. Escheat.
C. Eminent domain.
D. Foreclosure.
```
A
57
```
What is a private lien on a house?
A. Real estate taxes.
B. Mortgage.
C. Easement.
D. Zoning.
```
B
58
```
Typical contract contingencies include:
A. Price and square footage.
B. Landscaping and yard size.
C. Options and zoning.
D. Inspection and appraisal.
```
D
59
The Reina Fire Protection District needs $178,500in tax revenue to meet its budgetary
obligations. The tax warrant from the Assessor’s office shows that the total assessed
value within their borders is $22,812,500. What are the total mills for the district?
A. .00782 mills
B. 7.82 mills
C. 127.80mills
D. 26.982 mills
B. 7.82
60
A quitclaim deed will not typically indicate a reliable purchase price for real estate.
TRUE or FALSE
TRUE
61
```
What form of legal description provides lengths and directions?
A. Recorded plat.
B . Metes and bounds.
C. Rectangular survey.
D. Rectangular and metes and bounds.
```
B
62
```
2. A buyer purchases a section of land at $1,000 per acre. What was the price of the
section?
A. $140,000.
B. $640,000.
C. $320,000.
D. $600,000.
```
B
63
```
Which of the following is considered personal property?
A. Fence.
B. Window air conditioner.
C. Installed dishwasher.
D. Landscaping.
```
B
64
```
Which of the following are points of reference in the metes and bounds system?
A. Plat maps.
B. Monuments.
C. Streets.
D. Subdivisions.
```
B
65
```
Chattel and personalty are terms used to describe:
A. Real property.
B. Personal property.
C. Land improvements.
D. Real estate.
```
B
66
```
How many acres are contained in a quarter section?
A. 320.
B . 160.
C. 800.
D. 120.
```
B
67
John Smith is appraising a vacant site that is one third of an acre. Based upon a review
of recent land sales, the market indicates a value of $3.50 per square foot. What is the
value of the site?
50820
68
George Smith is appraising a vacant parcel that is a quarter section of land. Based
upon a review of recent land sales, the market indicates a value of $5,000 per acre.
What is the value of the land?
800,000
69
A parcel of land measuring 500 feet by 1000 feet contains how many acres? [rounded to
th
the nearest 10 of an acre]
11.5
70
```
Real estate is described as?
A. The residence.
B. Land and everything permanently attached to the land.
C. Fixtures.
D. Land.
```
B
71
The tenant’s share of crops is personal property, and also called
implements
72
ECONOMIC FACTORS- USED
Utility
Scarcity
Effective Purchasing Power
Desirability
73
economic forces PEGS
PHYSICAL/ENVIRONMENTAL
Economic
Governmental
Social
74
PHYSICAL/ENVIRONMENTAL FORCES
```
climate
water
topography
soil
natural hazards
contamination
location
```
75
main forces influencing values
availability
| cost of money
76
Government Forces
public services
building/zoning codes
land use regulations
legislative action
77
relationship of distance and time from a residential property to support services
linkage
78
Social Forces
population density
occupant education levels
age levels
79
cost
The sacrifice of money, goods, and services necessary to bring an item into
existence
-cost is a fact, not a value
80
price
amount paid, may or may not be justified, can be value, can be amount offered or asking
81
value
-The monetary worth of a property, goods, or service to buyers and
sellers at a given time.
The present worth of the future benefits that accrue with real property
ownership.
The monetary relationship between properties and those who buy, sell,
or use those properties.
82
4 agents of production LLCE
Land
Labor
Capital
Entrepreneurial Coordination (management)
83
leverage
using borrowed funds or capital in an attempt to obtain a greater profit in an investment
84
never a fact, always an opinion
value
85
value in use
Value in use is the value of a particular property for a particular use. Its value is subjective to its owner, user, or as an integral part of a production operation.
86
value in exchange
Value in exchange (exchange value) is the value, in terms of money, of any commodity in a typical market. Based upon actions of buyers and sellers.
87
market value (IAAO)
“The most probable sale price of a property in terms of money in a competitive
and open market, assuming that the buyer and seller are acting prudently and
knowledgeably, allowing that the transaction is not affected by undue pressures
88
for certain classes of property actual value is/is not the same as market value
is not
89
business value
going concern, The market value of all the tangible and
| intangible assets of an established and operating business with an indefinite life
90
insurance value
Insurance value is a replacement value which depends on the physical characteristics of a home, as well as the price of labor and materials in the area. This value is heavily reliant on the cost approach, for replacement costs in the event of property destruction. In most areas, these costs increase with time.
91
investment value
```
Investment value is the specific value of an investment to a particular investor or class of investors based on individual investment requirements; distinguished
from market value, which is impersonal and detached.
```
92
```
List the four economic factors that help create value:USED
A. ______________________
B. ______________________
C. ______________________
D. ______________________
```
Utility
Scarcity
Effective Purchasing Power
Desirability
93
```
Employment levels, wage rates, and interest rates are examples of which force?
A. Governmental.
B. Economic.
C. Social.
D. Physical.
```
Economic
94
```
Zoning is an example of which force?
A. Governmental.
B. Economic.
C. Social.
D. Environmental.
```
Governmental
95
Land that lies in a stream bed:
A. Will be more valuable because it is next to a water source.
B. Will be less valuable because it will cost more to build an improvement.
C. Will be more valuable because it has waterfront.
D. Will be subject to special government regulations as flood zone.
D
96
```
5. The out-migration of individuals in the mountains due to pine beetle blight is an example
of which force?
A. Governmental.
B. Economic.
C. Social.
D. Environmental.
```
D
97
There is a building moratorium (can’t build) within the city limits of Boulder. Which
factor has the greatest contribution to value changes?
A. Governmental.
B. Social.
C. Scarcity.
D. Economic.
C
98
```
An example of national economic data that may affect local property value would be:
A. Intrastate population migration.
B. Local heating costs.
C. Regional employment base.
D. Prime interest rate.
```
D
99
```
Housing layouts have changed over the years due to technological advances and
changes in which economic factor?
A. Utility.
B. Scarcity.
C. Desirability.
D. Effective purchasing power.
```
C
100
```
Consolidation of the banking industry is an example of which force?
A. Governmental.
B. Economic.
C. Social.
D. Environmental.
```
B
101
```
Building and Zoning Codes:
A. Positively affect value.
B. Negatively affect value.
C. Do not affect value.
D. Can either positively or negatively affect value.
```
D
102
The availability of potable water will affect the:
A. Number of building permits for residences.
B. Desirability of industrial land uses.
C. The number of boats on the waterways.
D. Number of homes with basements.
A
103
```
Annual flooding is an example of which force?
A. Governmental.
B. Economic.
C. Social.
D. Physical/Environmental.
```
D
104
A new elementary school and a small shoppette anchored by a convenience store with
gas station is built at the intersection of two major thoroughfares, but 3 miles from the
nearest urban center. This will likely increase the selling price of the undeveloped
land in the area.
TRUE or FALSE
TRUE
105
A private corporation has sent inquiries to the planning and zoning departments of
several counties regarding a toll road spanning 50 miles. At the present time, they are
asking for each department to declare what type of permits and permissions would be
necessary to allow the construction of the road. A proposed route through the various
counties is presented in each case. No official requests or approvals have been asked
for or given, but the head of the corporation announced the plan at a press conference
and presented the reporters with a copy of the proposed route.
What would you expect might happen to property values over the subsequent 6 months
along the proposed route?
A. The vacant land values would increase.
B. The residential values would decrease.
C. Both A and B.
D. Nothing, because everything is only proposed.
C
106
```
The value that is placed on ad valorem tax rolls is called ____________.
A. Market value.
B. Use value.
C. Actual value.
D. Assessed value.
```
D
107
```
The total dollars expended to develop an improvement is called _____________.
A. Cost.
B. Price.
C. Use value.
D. Market value.
```
A
108
```
The value of an investment to one particular investor is called ______________.
A. Use value.
B. Market value.
C. Assessed value.
D. Investment value.
```
D
109
Value in use is generally associated with:
A. The market approach to value.
B. The value to a particular owner or occupant.
C. The market value paid to the end user of abundant properties.
D. Valuation of middle income residential properties.
B
110
```
Cost, price, and value:
A. Are averaged for appraisal.
B. Are always equal.
C. Are seldom equal.
D. Must be equal for appraisal.
```
C
111
```
The value used in the event of fire or flood.
A. Market value.
B. Insurable value.
C. Assessed value.
D. Business value.
```
B
112
```
An appraisal estimating the price that a property would sell for based on a quick sale
would be estimating what type of value?
A. Market value.
B. Liquidation value.
C. Use value.
D. Going concern value.
```
B
113
What term BEST identifies the most probable price as of a given date for which
specified property rights should sell to a knowledgeable buyer in a competitive
market?
A. Market value.
B. Value in use.
C. Market price.
D. Investment value.
A
114
Which of the descriptions below would be best described as “salvage value”?
A. A dilapidated barn with weathered wood suitable for use as decorative paneling.
B. An old but sound storage building sitting in the middle of a plowed field.
C. A mobile home which has been condemned.
D. A house which has fire damage to the roof.
A
115
```
For real property, the term market value is most closely associated with which of the
following terms?
A. Value in use.
B. Intrinsic value.
C. Value in exchange.
D. Assessed value.
```
C
116
mercantalism
wealth based on amount of bullion, exports vs imports, 16th-18th century
117
physiocracy
wealth based on land development or agricultural surplus, labor produced wealth
118
anticipation
current value based on future benefit (income, appreciation, functionality)
119
Balance
agents of production in state of equilibirum
120
Change
value is never constant, cause and effect, abrupt or gradual
121
competition
2 or more parties acting independently to secure the business of a third party
122
conformity
correspondence in form, nature, character. To be in harmony
123
progression
inferior property value enhanced by surrounding nicer properties
124
regression
superior property value is diminished by surrounding inferior properties
125
substitution
alternatives that satisfy the same need, want, desire
126
cost of choosing another option
opportunity cost
127
surplus productivity
residual return after other agents of production are paid
128
“The reasonably probable and legal use of vacant land or an improved
property that is physically possible, appropriately supported, financially
feasible and that results in the highest value.”
highest and best use
129
tests fror HBU (highest best use)
physically possible
legally permissable
financially feasible
maximally profitable
130
property use no longer conforms to current zoning
legal non-conforming use
131
COST APPROACH TO VALUE FORMULA
RCN-DEP+LAND=VALUE
132
SALES COMPARISON/MARKET FORMULA
COMP. SP+/-ADJS=VALUE
133
INCOME FORMULA
I/R=VALUE (IRV)
134
income formula-income
net income after expenses
135
income formula-rate
market rate
136
Fed Reserve regulates banking system 3 ways
increase or decrease percent reserves
- sets fed discount rate
- sets interest rates and credit policies
137
market areas consist of
neighborhood and economic area
138
the immediate environment of the subject that has a direct and immediate impact of its value
neighborhood
139
combination of neighborhoods with similar value influences and types of land uses
economic area
140
```
If the cost of money (mortgage interest rates) increases, property:
A. Values increase.
B. Values decrease.
C. Times on market increase.
D. Both B and C.
```
D
141
```
A Certificate of Deposit is typically considered to be in what type of market?
A. Capital market.
B. Bankers market.
C. Money Market.
D. Real Estate Market.
```
C
142
If you have a fixed amortized loan, your payments are:
A. Lower in the beginning of the term.
B. The same amount each month.
C. Higher as the term progresses.
D. More interest payment and less principal payment as the term progresses.
B
143
```
The average number of years that Americans stay in one house is:
A. 30 years.
B. 15 years.
C. 7 years.
D. 20 years.
```
C
144
```
The principle of supply and demand states that prices will tend to increase when?
A. Supply exceeds demand.
B. Demand exceeds supply.
C. Supply and demand are in balance.
D. Competition increases.
```
B
145
One of the characteristics of an adjustable rate mortgage is:
A. The initial rate is usually higher than a fixed rate mortgage.
B. There is always a balloon payment.
C. The amortization is typically less than 30 years.
D. The monthly payment will increase or decrease.
D
146
Appraisal Foundation
The Appraisal Foundation (The Foundation) is not a government agency; it is a
private, non-profit organization formed for scientific and educational purposes
and dedicated to the education of appraisers. The Foundation has four boards:
the Board of Trustees, the Appraisal Practices Board (APB), the Appraiser
Qualifications Board (AQB), and the Appraisal Standards Board (ASB).
147
Appraisal Practices Board
The Appraisal Practices Board (APB) identifies and issues opinions on recognized
valuation methods and techniques which may apply to all disciplines of the
appraisal profession
148
Appraisal Qualifications Board
The Appraiser Qualifications Board (AQB) establishes
| qualification criteria for licensing, certification, and recertification of appraisers.
149
uspap
The Uniform Standards for Professional Appraisal Practice provide the accepted
professional standards for real property appraisal, appraisal review, appraisal
consulting, mass appraisal, personal property appraisal, and business appraisal.
Federal regulatory agencies, state governments, and other agencies have adopted
the uniform appraisal standards.
150
```
Which of the following establishes minimum criteria for real property appraiser
certification and licensing?
A. The Industry Advisory Board.
B. The Appraisal Standards Board.
C. The Appraiser Qualifications Board.
D. Congress.
```
C
151
For the regulation and discipline of appraisers in Colorado, state legislation created:
A. FIRREA.
B. The Colorado Board of Real Estate Appraisers.
C. The Uniform Standards for Professional Appraisal Practice.
D. The Appraisal Standards Board.
B
152
A simplified definition of an appraisal would be:
A. A written or oral opinion of value.
B. An estimate of market value valid for six months.
C. Establishment of a property’s worth.
D. An opinion of value based solely on local economic conditions.
A
153
The primary duties of the assessor are…
1. ______________
2. ______________
3. ______________
4. ______________
DISCOVER
LIST
CLASSIFY
VALUE
154
Appraisal practice includes:
A. Only market value appraisals.
B. All valuation.
C. Only appraisals, appraisal review, and appraisal consulting.
D. All valuation services performed by an individual acting as an appraiser.
D
155
```
If an appraiser knowingly misrepresents his/her credentials to obtain an assignment,
the appraiser has violated the:
A. Ethics Rule.
B. Competency Rule.
C. Scope of Work Rule.
D. Jurisdictional Exception Rule.
```
A
