Lesson 1 Flashcards
(53 cards)
When it comes to CRA scope, which options does the CRA have?
A) Accept because within SCOPE
B) Have the report co-signed by an AACI
C) Decline the assignment
All of them
Presumed facts about the property that are either uncertain or are simulated but untrue are known as:
Extraordinary Assumptions
Timothy has been asked with Appraising a Single Family Dwelling. Timothy opts out not to apply the cost approach while appraising the dwelling. Timothy’s choice not to apply the cost approach is an example of:
Extraordinary limited condition.
Which is it for the following
SCOPE OF PRACTICE or SCOPE OF WORK
It refers to the depth of work to be completed for an assignment, ranging from very simple, straightforward tasks to highly complex data analyses and reconciliation.
SCOPE OF WORK
Which is the only defined limitation on the SCOPE OF PRACTICE for AACI-designated based on your education and experience.
Competency
T of F
Hypothetical conditions must always be accompanied by an extraordinary assumption.
True
Extraordinary Limited Conditions are unacceptable in any assignment where they
A) Compromise the appraisers impartiality, objectivity, and independence
B) Limit the _____ __ _____ to such a degree that the results are not credible given the purpose of the assignment and the intended use of the results.
C) Limit the ______ of the reports that results in the report to be misleading
B) Scope of Work
C) contents
T or F Reserve Fund studies are also known as deprecation reports.
True
One of the requirements for a reserve fund study is a
financial analysis
True
An _________ is a statement or condition that is presumed or assumed to be true and from which a conclusion can be drawn.
CUSPAP defines an assumption as “that which is taken to be true”. An extraordinary assumption is an assumption which if found to be false could alter the resulting opinion or conclusion.
Assumption
What best describe’s the appraiser’s client?
The person who engages the appraiser to complete the assignment.
According to CUSPAP the burden of proof to support the scope of work decision level and the level of information included in the report lies on:
The Appraiser
A reliance letter gives permission to parties other than the intended user to use the appraiser’s report for their own ______.
purpose
In the SCOPE OF REVIEW assignment the reviewer develops his/her own opinion of value the reviewer must develop a scope of work that covers both the review and the ______
_____, which means complying with two Standards 1) The Review Standard and the ______
_______
appraisal requirements
Appraisal Standard
Which of the following determines the extend fo the CRA’s SCOPE OF PRACTICE LIMITATIONS.
Highest or Best use and Actual and Assumed
You have arrived at work Monday morning in your appraisal office and you receive a phone call from a potential client looking to hire your professional services. In a most unusual day, you then receive two more phone calls from this same client about further appraisal work on this same property. In other words, a single client, a single property, but with three differing intended uses. The three scenarios are as follows:
Scenario 1: the client owns a single-family dwelling and is attempting to negotiate a mortgage; needs an appraisal for lending purposes.
• Scenario 2: the client has been offered a promotion in another city and the employer will help with relocation expenses, paying the difference between the value of the current residence and an equivalent residence in the new city.
• Scenario 3: the client calls a third time, notifying you that their spouse will not be joining them in this relocation; the client now needs your assistance in preparations for the forthcoming matrimonial litigation.
These three scenarios were presented to 30 participants in the CPD 124 Scope of Work webinar. The participants were asked how long they would spend on each scenario, specifically the tasks of neighbourhood analysis, supply/demand analysis, inspection of comparable sales, and financing verification for the comparable sales.
How would the letter of engagement would differ for each scenario….
Each of the three scenarios builds on depth of due diligence needed to present credible professional work.
Applying the Income approach can be done by two different processes
Gross Income Multiplier
Overall Cap Rate
New Rental apartment buildings are rare
Because of why?
Marginal Economics
The term “Bulk condominium” means what?
All the units are held by 1 investor with goal of achieving monthly rents.
What are PRIMARY SOURCES when determining market value on a property?
- *Paired Sales
- *Resale Analysis
- *Multiple regression/Graphing Analysis
- *Interviews with Brokers, Appraisers, and Developers, etc.
What are 2NDARY SOURCES when determining market value on a property?
- *HPI
- *MLS statistics
- *CMHC Statistics
- *Newspaper Reports
Scenario: You need to appraise a condo and found a current sale and sale from 3 months ago.
There has been an indication that the Market conditions has changed since 3 months ago.
The current sale is $275,000 and the sale from 3 months ago was $250,000
How would you calculate the time adjustment (Market change) in months?
(Current Sale/Sale from 3 months ago) - 1 x 100 = ___$/3 =
____% per month
If you are appraising a Duplex, Triplex, or 4Plex property, which one of the approaches to value you would rely on what is the first thing and 2nd step that you would need to do?
1st step: You would need to find out the HBU for the multi-family property by doing market research.
2nd step: Then you would need to decide if you should do INCOME APPROACH 1st and DIRECT COMPARISON approach as a SUPPORTING 2ndary Data.
Why is the DIRECT COMPARISON APPROACH used for valuing Multi-family dwellings.
**It measures MARKET CONDITIONS by Analyzing Supply and Demand trends
